The definitions contained in G.S. 62‑3 of the 1963
Public Utilities Act shall be applicable to all rules and regulations of the
Commission, and in addition thereto, the following terms shall be construed as
herein defined unless the context indicates that a different meaning is
intended:

(1) Public Utility or Utility. - The term
"public utility" or "utility" means and includes any person
or any business which the Commission is authorized by law to supervise, control
or regulate in any manner.

(2) Examiner. - The term "examiner"
means a member of the Commission Staff, or a Hearing Commissioner, to whom the
Commission has referred a matter for the purpose of hearing and taking evidence
and the making of a report and recommendation of an appropriate order or
decision thereon. (G.S. 62-76.)

R1-02 OFFICE HOURS AND SESSIONS

(a) Office Hours. - The offices of the Commission in the Dobbs
Building, 430 North Salisbury Street, Raleigh, North Carolina, will be open
for business daily during regular working hours for departments and agencies of
State government, which normally extend from 8:00 a.m. to 5:00 p.m., except
Saturdays, Sundays and holidays. Mail should be addressed to the North Carolina
Utilities Commission, 4325 Mail Service Center, Raleigh, NC 27699-4325
or Public Staff - North Carolina Utilities Commission, 4326 Mail
Service Center, Raleigh, NC 27699-4326.

(b) Public Sessions. - Public sessions of the Commission
will be held in its offices in the city of Raleigh, as the need therefor
requires, from 9:30 a.m. to 12:30 p.m. and from 2:00 p.m. to 5:00 p.m. on
Tuesday, Wednesday, Thursday and Friday of each week, and at such other places
in the State and at such times as the Commission may from time to time direct.
These sessions will be devoted to the general work of the Commission, including
hearing complaints, applications and petitions, and holding conferences with
individuals and delegations with respect to matters over which the Commission
has jurisdiction. Subject to the provisions of G.S. 62‑70, persons
desiring a conference with the Commission should arrange therefor in advance,
as scheduled investigations or hearings will not be interrupted for conferences
with other parties except in cases of emergency.

(c) Executive Sessions. - The members of the Commission
will devote Monday of each week exclusively to executive sessions, including
making and formulating orders and decisions on matters which have been heard,
planning and coordinating the work of the Commission, and advising with its
staff and employees. Members of the Commission will not be available for other
business on Mondays. (NCUC Docket No. M-100, Sub 75, 10/27/77; NCUC Docket No.
M-100, Sub 128, 04/10/00.)

R1-03 PARTIES

(a) Classification. - Parties to proceedings before the
Commission are designated as applicants, petitioners, complainants, defendants,
respondents, protestants, or interveners, according to the nature of the
proceeding and the relationship of the parties thereto.

(b) Applicants and Petitioners. - Persons filing formal
written requests with the Commission for some right, privilege, or authority
within the jurisdiction of the Commission to grant are designated as applicants
or petitioners. These designations are used synonymously in many sections of
the statute.

(c) Public Staff of the Commission. - Persons appearing
under statutory authority of G.S. 62-15.

(d) Complainants. - Persons who complain of acts or things
done or omitted to be done in violation of some law administered by the
Commission, or in violation of some rule, regulation, or order issued by the
Commission, are designated as complainants.

(e) Defendants. - Persons against whom a complaint is filed
are termed defendants.

(f) Respondents. - Persons named in an order of
investigation, rule to show cause, or complaint made by the Commission upon its
own motion are termed respondents.

(g) Protestants. - Persons who oppose the granting of an
application or petition are designated as protestants.

(h) Interveners. - Persons, other than the original parties
to a pending proceeding, who voluntarily become parties thereto with leave of
the Commission, are designated as interveners. (NCUC Docket No. M-100, Sub 75,
10/27/77.)

R1-04 COMMENCEMENT OF PROCEEDINGS

Proceedings may be instituted before the Commission in the
following manner:

(1) By Informal Proceedings.

(a) Whenever practical, informal proceedings are
recommended for speedy, amicable adjustments of complaints or controversies
which do not necessarily require a formal hearing or a formal order or
decision, and to that end, informal complaints may be made to the Commission or
Public Staff by letter, or otherwise, setting forth the name and post‑office
address of the person making the complaint; the name and post‑office
address of the person or persons against whom the complaint is made; a concise
statement of all the facts necessary to an understanding of the situation
presented; and a statement of the relief desired. Matters so presented will be
taken up by the Commission or Public Staff with the parties affected, by
correspondence, or otherwise, in an endeavor to bring about an adjustment of
the subject matter of the complaint without a formal order or hearing.

(b) The filing of an informal complaint is
without prejudice to the right to thereafter file a formal complaint.

(c) An informal complaint will not be docketed
for formal hearing and no formal order will be issued thereon, but matters thus
presented may be transferred by the Commission to the Formal Docket for formal
action by the Commission, in which case the complainant will be required to
file a formal complaint.

(2) By Formal Proceedings. - Matters which
require the taking of testimony, a formal hearing and a formal order must be
instituted by filing with the Commission a formal application, petition, or
complaint, as provided by Rule R1‑5.

(3) By the Commission. - The Commission may
institute proceedings upon its own motion, in which case the procedure shall be
substantially as follows:

(a) Allegations. - Any rule to show cause,
complaint, order of investigation, or other proceeding instituted by the
Commission upon its own motion against any particular person or persons shall
set out the grounds therefor with such clarity as to inform the respondent or
respondents therein named of the issue involved and the particular information
or action required by the Commission. Reasonable time shall be given within
which to comply with the Commission's order, or within which to prepare a
defense, depending on the nature of the proceeding and the work required.

(b) Answers. - Formal written answers or other
pleadings need not be filed by respondents in such cases unless so directed by
the Commission.

(c) Procedure at hearing. - In proceedings
instituted by the Commission, evidence will ordinarily be offered in the
following order:

(1) By the Commission Staff,

(2) By the Public Staff, and

(3) By the respondents, but the presiding
officer in any such proceeding may direct the order in which evidence shall be
offered.

(d) Parties. - Those having an interest in the
subject matter of any proceeding instituted by the Commission may become
parties thereto by compliance with Rule R1-19.

(NCUC Docket No. M-100, Sub 75, 10/27/77.)

R1-04A Address Requirements; Service by First Class Mail or
Electronic Mail

Within 30 days of the effective date of this Rule, all
public utilities, persons or entities otherwise certificated, monitored or
regulated by the Commission shall provide the Commission with a designated
contact, mailing address and an electronic mailing address. All persons or
entities hereinafter seeking certification, monitoring or regulation by the
Commission shall provide the same information in the initial application or
petition requesting such certification, monitoring or regulation. Within 30 days
of changing either the mailing address or the electronic mailing address, such
public utilities, persons or entities otherwise affected by this Rule shall
notify the Commission of such change. Information required to be provided by
this Rule shall be sent to chiefclerksoffice@ncuc.net.
Except as prohibited by G.S. 62-63 and G.S. 62-79, the Commission may serve
orders, decisions or other documents generated by the Commission on such public
utilities, persons or entities by first class mail or electronic mail.

(NCUC Docket No. M-100, Sub 134, 3/11/10.)

R1-04B Electronic Mail Address Requirements; Exceptions

All public utilities, persons or entities otherwise
certificated, monitored or regulated by the Commission, all persons or entities
hereinafter seeking certification, monitoring or regulation by the Commission,
and all attorneys representing public utilities, persons or entities before the
Commission shall comply with the provisions of these Rules requiring an
electronic mailing address; provided that, upon good cause shown, the
Commission may relieve such party, public utility, person or entity of
electronic mailing address requirements imposed by these Rules. Individuals
seeking to plead their own cause before the Commission are encouraged but not
required to comply with the electronic mailing address requirements herein
adopted. The Commission may serve orders, decisions or other documents on
individuals choosing to comply with these Rules by first class mail or
electronic mail.

(NCUC Docket No. M-100, Sub 134; 3/11/10.)

R01‑05 PLEADINGS,
GENERALLY

(a) Application of Rule. — This rule applies to all
pleadings in formal proceedings, including applications, petitions, complaints,
answers, protests, and other formal written statements of facts or law on which
the party making the same relies for appropriate action or relief by the
Commission.

(b) Contents. — All formal pleadings shall show

(1) The correct name, post‑office
address, and electronic mailing address of each party by or for whom the
particular pleading is filed, and the name, post‑office address and
electronic mailing address of their attorney, if any;

(2) A full and clear statement of facts which
said party or parties are prepared to prove by competent evidence at the
hearing, the proof of which will warrant the relief sought; and

(3) A statement of the specific relief sought.

(c) Form and Size. — All pleadings and exhibits in formal
proceedings shall be printed, typewritten, or otherwise duplicated in legible
form on white paper. Unless printed the impression shall be on one side of the
paper for the original document and double-sided for any required copies, the
pages beginning with the second page shall be numbered, and the lines shall be
double spaced, except quotations of two or more lines which shall be single
spaced and indented. The use of paper 8-1/2 inch x 11 inch with a left margin
of approximately one and one-half inches is required.

(d) Signature and Verification. — Pleadings and amendments
thereto shall be signed in ink and verified by one of the parties thereto who
is acquainted with the facts. Pleadings filed on behalf of a corporation or an
association shall be signed and filed by a member of the Bar of the State of
North Carolina admitted and licensed to practice as an attorney at law, and may
be verified by an officer, attorney or agent thereof who is acquainted with the
facts. This subsection does not apply to pleadings filed by the Commission.

(e) Construction. — All pleadings shall be liberally
construed, and errors or defects therein which do not mislead or affect the
substantial rights of the parties involved shall be disregarded.

(f) Amendments. — Any pleading may be amended or corrected
or any omission supplied prior to notice of hearing. After notice of hearing,
it will be in order to move for leave to amend in accordance with Rule R1‑7.

(g) Copies Required. — The original plus twenty-five (25)
copies of all pleadings shall be filed with the Commission (unless filed electronically
pursuant to Rule R1-28 or otherwise provided by the exceptions below), and
shall include a certificate that a copy thereof has been served upon each party
of record in the cause or upon counsel of record in accordance with Rule R1-39.

Exception 1. For filings by Class A
& B electric, telephone, and natural gas utilities under Rules R1‑7,
R1‑15, R1‑17, and R1‑24, an original plus thirty (30) copies
shall be provided to the Commission.

Exception 2. For filings by Class A and
B water and sewer utilities for rate increases or transfers, an original plus
twenty four (24) copies shall be provided to the Commission. For all other
filings by Class A and B water and sewer utilities, an original plus seven (7)
copies shall be provided to the Commission.

For filings by Class C water and sewer
utilities for rate increases or transfers, an original plus seven (7) shall be
provided to the Commission. For all other filings by Class C water and sewer
utilities, an original plus seven (7) copies shall be provided to the
Commission.

Exception 3. For filings of applications
by motor carriers under Rule R2‑8(a)(1) and (b)(1), an original and three
(3) copies shall be provided to the Commission.

In addition to the
requirements above, when applicable, a single-sided copy of testimony and
exhibits of expert witnesses shall be filed for the benefit of the Court
Reporter.

NOTE: A photocopy which has
been signed after copying shall be considered an original.

Except as provided in these rules in particular proceedings,
protests shall comply with Rule R1‑5. Protests shall be filed at least
ten (10) days prior to the date fixed by the Commission for the hearing of the
cause, unless the notice of hearing fixes the time for filing protests, in
which case such notice shall govern.

04 NCAC 11 R01-07 MOTIONS

(a) Purpose. — Motions may be addressed to the Commission:

(1) To make pleadings more specific, or for a
bill of particulars,

(2) To strike irrelevant or immaterial
allegations in pleadings,

(3) To make additional parties, to strike
improper parties, or to substitute parties, or for leave to amend pleadings,

(4) To dismiss a pending proceeding for want of
jurisdiction,

(5) For postponement of a hearing, or of the
effective date of an order, or for an extension of time within which to comply
with an order of the Commission, or for such other relief as may be
appropriate.

(b) Form. — Motions, unless made during a hearing and
dictated into the record, shall be in writing, shall comply with the
requirements of Rule R1-5(c), shall be signed by the party making the same or
by his attorney, and if based on matters which do not appear of record shall be
verified or supported by affidavit. Every written motion shall be clearly and
concisely stated in a separate paragraph without argument, explanation, or
other extraneous statements. The statement of the motion may be followed by one
or more paragraphs of explanations, arguments, and briefs in support thereof as
the party may consider appropriate. Motions dictated into the record shall
likewise be first clearly stated without arguments or explanations.

(c) Copies; Notice to Parties. — Subject to the provisions
of Rule R1-21(c) every motion made in a pending proceeding other than those
made before the Commission or an Examiner at the time of the hearing, shall be
filed with the Commission, with original plus the number of copies specified in
Rule R1-5(g), and shall certify that a copy thereof has been served uponeach
party of record in the cause, or upon the attorney of record of each such party
in accordance with Rule R1-39.

All pleadings, papers and correspondence relating to formal
proceedings to which docket numbers have been assigned shall refer to such
docket numbers.

R1-09 COMPLAINTS AND PROCEDURE THEREON; ANSWERS

(a) Who May Complain. - Complaint may be made by the
Commission on its own motion or by the Public Staff or by any corporation or
person, chamber of commerce, board of trade, labor organization, or any civic,
commercial, mercantile, traffic, agricultural, or manufacturing association or
organization, or any body politic, or municipal corporation, or any agency of
the State of North Carolina, or any electric membership corporation organized
under Chapter 117 of the General Statutes, as amended, having an interest in
the subject matter of such complaint, or by any public utility.

(b) Contents. - Rule R1-5 will apply to complaints under
this Rule and, in addition thereto, complaints under this Rule shall set forth
in numbered paragraphs:

(1) The full name, post-office address, and the
electronic mailing address of each complainant.

(3) The full name, post-office address, and, if
available, the electronic mailing address of each defendant against whom
complaint is made.

(4) A clear, concise statement of the acts or
things done or omitted to be done by any public utility, or the respects in
which any rule, regulation, or charge fixed by or for any public utility is in
violation of any provision of law or of any order or rule of the Commission, or
the respects in which any rate, charge, schedule, classification, rule,
regulation, or practice is unjust and unreasonable.

(5) The particular relief desired.

(c) Procedure upon Receipt of Complaint. - Upon receipt of
a complaint which is in substantial compliance with these procedural rules and
which appears to state a cause of action within the jurisdiction of the
Commission, the Commission shall serve a copy thereof on each defendant named
in the complaint, together with an order directing that the matters complained
of be satisfied or that an answer be filed to the complaint within ten days
after such service; provided, that the Commission may in particular cases
extend or shorten the time for satisfying the complaint or for filing answer
thereto.

(d) Satisfaction of Complaint. - If the defendant desires
to satisfy the complaint, he shall submit to the Commission, within the time
allowed for satisfaction or answer, an original plus four copies of a statement
of the relief which he is willing to give, a copy of which the Commission will
transmit forthwith to the complainant. On acceptance of this offer by the
complainant with the approval of the Commission, no further proceedings need be
taken.

(e) Answer. - The answer must admit or deny each material
allegation of the complaint or allege insufficient information on which to
admit or deny the same. It shall set forth any new matter relied upon as a
defense and shall be so drawn as to fully advise the complainant and the
Commission of the particular grounds of defense. The filing of an answer will
not be deemed an admission of the sufficiency of the complaint and shall be
without prejudice to the right of the defendant to thereafter file a motion to
dismiss the complaint for failure to state a cause of action.

(f) Interveners. - Any person or organization having an
interest in the subject matter of the complaint may intervene and be made a
party to the proceeding by complying with the provisions of Rule R1-19.

(g) Copies Required. - Every complaint and every answer
under this rule shall be filed with the Commission, with original plus 15
copies, with an additional copy for each of the other parties of record in the
case or their counsel of record. The Commission will serve such complaints and
answers on the other parties or their counsel.

Applications for motor carrier operating rights of household
goods and passengers (certificates) must be made on forms prescribed and
published by the Commission. Such forms with instructions will be furnished
upon request.

(NCUC Docket No. T-100, Sub 32, 8/23/95.)

R1‑11 Protests to motor carrier applications

(a) Contents. — Any person or carrier without specific
leave to intervene may protest any motor carrier application for operating
rights to transport passengers or household goods, or to an application for
approval of a sale, lease, or a merger of motor carrier operating rights of
household goods or passengers, upon the filing of a protest, under oath,
showing that the protestant has an interest in the subject matter of the
application, which protest shall set forth, among other things:

(1) A brief but definite description of the
operating rights or of other rights or interests of the protestant which will
be adversely affected by the granting of the application.

(2) The particular way and manner and the
probable extent to which the protestant will be adversely affected by the
granting of the application, and if the application is for operating rights
(for a certificate) to transport passengers or household goods, and the
protestant is a carrier, the protest shall contain information of the kind and
in substantially the form and detail shown by the following illustration:

ILLUSTRATION: That the granting of
the application will authorize a transportation service in competition with the
transportation service which the Commission has authorized the protestant to
perform under (certificate number …), in that, transportation service of the
same kind and class may be provided either by the applicant or by the
protestant to, from, and between the following points and places:

(1) On U.S. Highway 64 between Lexington and Raleigh.

(2) On U.S. Highway 220 between Greensboro and
Rockingham.

(3) On N.C. Highway 49 between Concord and Burlington.

(4) To, from, and between all points and places in the
counties of Montgomery, Moore, Randolph and Davidson.

(b) Time for Filing. — Protests, as herein provided, must
be filed with the Commission (original and three (3) copies) not less than ten
(10) days prior to the date fixed for the hearing; provided, the notice of
hearing may fix the time for filing protests, in which case such notice shall
govern. All protests shall be signed and verified as provided in Rule R1‑5,
and shall certify that a copy thereof has been delivered or mailed to the
applicant or to applicant's attorney, if any.

No lease, sale, pledge, merger, or other transfer of motor
carrier operating rights under any certificate issued by the Commission shall
become effective except after application to and written approval by the
Commission, which application shall be verified, filed with the Commission
(original and three (3) copies), and shall set out, among other things, the
following:

(1) The name and post‑office address of
each party to the proposed transaction.

(2) An accurate description of the operating
rights involved in the proposed transaction, and the certificate number of such
operating rights.

(3) A clear, concise explanation of the exact
nature of the proposed transaction, and its purpose. Attach as exhibits copies
of all contracts and agreements between the parties constituting a part of the
proposed transaction.

(4) A statement or an exhibit from which the
Commission may determine the extent to which such operating rights have been
and are being exercised. This may be shown by giving the bus‑miles or
truck‑miles operated under the rights involved within a given period, the
amount of traffic (passengers or tons of freight) handled during said period,
and the gross revenue received.

(5) A statement under oath complying with the
requirements of G.S. 62‑111 as to the debts and claims, if any, against
the owner of said operating rights arising out of the operation.

(6) A statement from which the Commission may
determine that the transferee has the facilities, the business experience, the
financial ability, and is otherwise qualified to perform the transportation
service in a satisfactory manner.

(a) Contents. - A motor carrier seeking authority to become
a self‑insurer will be required to satisfy the Commission that it is in
such financial condition as to be able to pay personal injury and property
damage claims, within the limits of the self‑insurance proposed, without
seriously affecting its financial stability or its continued service to the
public. The petition for such authority must be verified, filed in triplicate,
and set forth, among other things:

(1) The correct name and post office address of
the motor carrier seeking authority to become a self-insurer, and if not a
corporation, and not an individual who is the sole owner of the business, the
correct name and post office address of each person owning an interest in the
business must be given.

(2) A brief history of the carrier's
operations, giving the length of time the business has been operated under the
present management, the number of over‑the‑road buses or trucks, or
other units of rolling equipment used in the operation in North Carolina, the
approximate bus‑miles or truck‑miles operated within the State
during the last 12 months for which figures are available.

(3) A statement showing the amount of insurance
premiums paid during each year for a period of three years next preceding the
filing of the application and the actual amount paid each year during said
period by the applicant and the applicant's insurance carrier in settlement of
personal injury and property damage claims.

(4) The amount in which the applicant proposes
to become a self-insurer, and if less than the Commission's minimum insurance
requirements as provided in Rule R2-36, the amount of excess insurance
applicant proposes to carry.

(5) The plans applicant now has in effect, or
proposes to put into effect if permitted to become a self-insurer, for
investigating personal injury and property damage claims arising out of the
operation and its plans for making available funds for the settlement of such
claims.

(6) Balance sheet, and income and profit and
loss statement for the latest available period.

(b) Hearing. - The Commission may approve an application
for permission to become a self‑insurer without a hearing, but only upon
an application which fully warrants it in finding that the applicant is
qualified to become a self‑insurer to the limits set out in the
application.

Whenever there shall be filed with the Commission by any
public utility or carrier, subject to its jurisdiction, any schedule stating
new or changed rate or rates, as provided by G.S. 62‑134, 62‑135,
62‑138, 62‑140, 62‑142, or 62‑146, the Commission may,
upon protest or complaint of the Public Staff or of any interested party, or
upon its own initiative, suspend such rates or charges pending an investigation
of the lawfulness thereof, and to that end the following proceedings will be in
order:

(1) Any public utility filing or applying for
an increase in rates for electric, telephone, natural gas, water, or sewer
service shall notify its customers proposed to be affected by such increase of
such filing within 30 days of such filing, which notice shall state that the
Commission shall set and shall conduct a trial or hearing with respect to such
filing or application within six months of said filing date. All other public
utilities shall give such notice in such manner as shall be prescribed by the
Commission.

(2) Protests or Complaints. — Protests or
complaints against any tariff or schedule of rates or charges filed with the
Commission under the provisions of any of the foregoing sections of the statute
should be made in writing and filed with the North Carolina Utilities
Commission, Raleigh, North Carolina, with a copy to the Public Staff at least
ten (10) days before the effective date of the tariff or schedule. Such
protests or complaints should comply with the provisions of Rule R1‑5;
provided, that, in cases of emergency, notice of intention to file such
protests or complaints may be given by telegram to the Commission with a copy
to the Public Staff and to the publishing utility carrier, agent, broker, or freight
forwarder, within the time limits herein provided, but such notice by telegram
must be immediately followed by formal protests or complaints in accordance
with this rule.

(3) Suspension Order. — If the Commission
determines upon such protest or complaint, or upon its own initiative, to
suspend such schedule of rates or charges, it shall issue an order suspending
the same for a period and in the manner authorized by statute in such cases. A
copy of such order shall be served by the Commission on the party filing such
schedule and it shall give notice thereof to such other parties as it deems
adequate.

(4) Reply. — Within twenty (20) days after
service of the Commission's order suspending said schedule, the party filing
such schedule may file with the Commission a reply with a copy to the Public
Staff [original plus the number of copies specified in Rule R1‑5(g)],
under oath, of the particular reasons, or conditions relied upon to warrant the
Commission in vacating said suspension order.

(5) Notice of Hearing. — When the time and
place of hearing shall have been determined, the Commission shall give due
notice thereof to all parties to the proceeding and to such other parties as it
deems necessary to bring the matter to the attention of those having an
interest in the proceeding.

(6) Parties. — Persons having an interest in
the subject matter of proceedings under this rule and who have not filed
protests or complaints, as provided by subdivision (1) hereof, may become
parties to the proceeding by compliance with Rule R1‑17(e).

(a) No public utility except Payphone Service Providers,
Competing Local Providers, and utilities providing only intraLATA long distance
service, interLATA long distance service and/or long distance operator service,
shall pledge its assets, issue securities, or assume liabilities of the
character specified in G.S. 62-161, except after application to and approval by
the Commission. Such applications shall be made under oath, filed with the Commission
with twenty (20) copies, and shall contain the following specific information:

(1) The existing conditions relied upon to
support the Commission in making the specific findings required by G.S. 62-161.
The application shall set forth the particular facts and circumstances showing
that the proposed issuance of securities, pledging of assets, or assumption of
liabilities and obligations (i) is for some lawful object within the corporate
purposes of the public utility, (ii) is compatible with the public interest,
(iii) is necessary or appropriate for or consistent with the public performance
by such utility of its service to the public, (iv) will not impair its ability
to perform that service, and (v) is reasonably necessary and appropriate for
the purposes for which it is issued.

(2) The class and principal amount or par value
of any securities to be issued or assumed.

(3) An estimate of the expenses to be incurred
in connection with the pledging of assets, the issuance and sale of securities,
or the assumption of liabilities.

(4) In case of the sale of securities, whether
the sale will be to the public, to institutional investors, or otherwise, and
whether the sale will be consummated by means of public bidding or by means of
a negotiated transaction. If the sale is by means of a negotiated transaction,
the application shall contain the proposed unit sale price of any securities to
be issued together with the interest or dividend rate (common stock excepted)
to be incurred thereon.

(5) The purpose or purposes to which the
proceeds obtained are to be used. If the purpose or purposes for which the
proceeds obtained are to be used is to refinance or pay off short term
indebtedness as defined in G.S. 62-167 and not heretofore approved by order of
the Commission, the application shall set forth the purpose or purposes for
which said outstanding indebtedness was incurred, and if said original
indebtedness was spent on construction, the application shall list amounts by
the major construction accounts and the total construction expenditures for
which the proceeds of the original indebtedness were expended.

(6) A balance sheet and an income statement for
a recent representative period. The application shall also include a pro forma
balance sheet and income statement showing the balance sheet and the income
statement as they would be after the issuance of said security.

(7) In any case where the applicant has filed
or subsequently files a prospectus or other similar document with the
Securities and Exchange Commission or with prospective investors for private
placement in connection with said issue, eleven copies of such prospectus or
document shall be filed with the North Carolina Utilities Commission at the
time the application is filed with the Securities and Exchange Commission or
with private investors.

(8) A statement of the source and application
of funds, sometimes referred to as cash flow, showing the amounts available
from all sources since the last finance application, to meet any part of the
purposes or projects for which the financing or issue is required, including
contributions from customers or others, salvage proceeds, depreciation reserve
accruals, any unused balances in prior financing applications, and retained
earnings, as available for payment of construction expenditures reported under
subsection (a)(5).

(9) In the case of the sale of securities
through private placement or the entering into an agreement for the sale and
lease-back of assets or any other financing transaction for which the effective
date of the consummation and/or implementation of the transaction is expected
to take place as much as three months after the negotiation of the interest
cost or other financing cost of the transaction is determined, that the
utilities shall file with the Commission for approval of the proposed
transaction as soon as the rates of interest and/or other financing costs are
tentatively agreed on. All the other requirements under R1-16 are applicable to
this particular type transaction and are to be included in the filing with a
special emphasis on supporting the basis for the proposed rates of interest and
financing the cost for which approval is sought.

(b) This rule does not apply to short term loans as defined
in G.S. 62-167.

(a) Application of Rule. — This rule does not apply to the
establishment of a rate or charge for a new service, nor to an adjustment or a
change of a particular rate or charge for the purpose of eliminating
inequities, preferences, or discriminations. It does apply to all applications
for or filings of a general increase in rates, fares, or charges for revenue
purposes or to increase the rate of return on investment or to change
transportation rates, fares, etc. All Class A and B electric, telephone,
natural gas, water, and sewer utilities shall file written letters of intent to
file general rate applications with the Commission thirty (30) days in advance
of any filing thereof.

(b) Contents of Filing or Application. — The filing or
application shall clearly set out the reasons or conditions which, in the
opinion of the applicant, warrant an increase in applicant's rates, fares, or
charges, whether such increase is to be brought about by a change in rate
schedules, by a change in any classification, contract, practice, rule,
regulation, or otherwise, and said application shall contain, among other
things, the following data, either embodied in the application or attached
thereto as exhibits:

(1) Present Charges. — A statement (not
necessarily in tariff form) showing the rates, fares, tolls, or other charges
presently in effect which the applicant seeks to increase.

(2) Proposed Charges. — A statement showing the
rates, fares, tolls, or other charges which the applicant seeks to place in
effect.

(3) Original Cost. — A statement or exhibit
showing the original cost of all property of the applicant used or useful in
the public service to which such proposed increased rates relate. If the
original cost of any such property cannot be accurately determined, such facts
should be stated and the best estimate of the original cost given. In case such
property consists of plants or facilities which have been devoted to the public
use by some other person, municipality, or utility, and subsequently purchased
by the applicant, the purchase price of such plants or facilities must be
shown, and also the original cost and accrued depreciation at the time of
purchase must be shown, if known.

(4) Present Fair Value. — If applicant intends
to offer proof as to the present fair value of its property, the application
shall state the nature of such proof in such form and detail as to disclose
fully the method used in obtaining such proof and the accuracy thereof. In the
preparation of such data, it is recommended that the various property accounts
be identified by the account numbers used in the Uniform System of Accounts.

(5) Depreciation. — The application shall show
the accrued depreciation on said property as shown on applicant's books and the
rate or method used in computing the amount charged to depreciation.

(6) Material and Supplies. — A statement
showing the cost of material and supplies which the applicant had on hand on
the closing date of the twelve months' period referred to in (8) below. If the
amount on hand is more or less than reasonably necessary for efficient and
economical operation of the business, an explanation should be made.

(7) Cash Working Capital. — A statement showing
the amount of cash working capital which the petitioner keeps on hand and finds
necessary to keep on hand for the efficient, economical operation of the
business.

(8) Operating Experience. — A statement
covering the last twelve consecutive months for which data are available,
showing

a. The gross operating revenues received,

b. The expenses incurred, including operating
expenses, depreciation, and taxes, and

c. The net operating income for return on investment.

(9) Effect of Proposed Increase. — A statement
showing the applicant's estimate of

a. The additional annual gross revenue which the
proposed increase in rates and charges will produce,

b. The additional annual expenses anticipated by reason
of such additional gross revenue,

c. The net additional revenue which the proposed
increase in rates will produce, and

d. The rate of return which the applicant estimates
it will receive on the value of its property after giving effect to the proposed
increase in rates.

e. This statement is to include the total capital
structure of the utility before and after the proposed increase. Ratios for
each component of the capital structure are to be shown with the common
stockholders' equity capital and the net income used in the rate of return on
the common equity calculation clearly identifiable.

f. Every general rate application shall contain a
one-page Summary of all proposed increases and changes affecting customers and
such Summary shall appear as Appendix 1.

g. Rescinded by NCUC Docket No. M-100, Sub 82, 4/27/81.

(10) Balance Sheet. — The application shall
include a balance sheet and income statement for a recent representative
period.

(11) Working Papers to Be Available. — Supporting
data and working papers underlying the above exhibits shall be made available
promptly upon request in the offices of the Commission or Public Staff in
Raleigh or in an office of the public utility in North Carolina designated by
the Commission, for examination by all interested parties.

(12) All general rate case applications of Class
A and B electric, telephone and natural gas companies, and Class A water and
sewer companies shall be accompanied by the information specified in the
following Commission forms respectively:

(13) Class A & B electric, telephone and
natural gas utilities shall file with and at the time of any general rate
application all testimony, exhibits and other information which any such
utility will rely on at the hearing on such increase. Class A and B water and
sewer utilities shall file 45 days prior to the hearing on the general rate
case application all testimony which such utility will rely on. Class A and B
water and sewer utilities shall file with the application all exhibits
supporting the general rate increase. The application, testimony and exhibits
and other information shall be filed in sets which are separately numbered and
separately bound, boxed, or rubber-banded. The originals shall be in Set No. 1.
The Commission Staff, the Public Staff, the Attorney General and all other
Intervenors or Protestants shall file all testimony, exhibits and other
information to be relied upon at the hearing 20 days in advance of the
scheduled hearing.

In the event any affected utility wishes to rely on G.S.
62-133 (c) and offer evidence on actual changes based on circumstances and
events occurring up to the time the hearing is closed, such utility should file
with any general rate application detailed estimates of any such data and such
estimates should be expressly identified and presented in the context of the
filed test year data and, if possible, in the context of a twelve (12) month
period of time ending the last day of the month nearest and following 120 days
from the date of the application. Said period of time should contain the
necessary normalizations and annualizations of all revenues, expenses and rate
base items necessary for the Commission to properly investigate the impact of
any individual circumstance or event occurring after the test period cited by
the applicant in support of its application. Any estimate made shall be filed in
sufficient detail for review by the Commission.

(c) Supplemental Data. — The Commission shall consider such
relevant, material, and competent evidence as may be offered by any party to
the proceeding tending to show actual changes in costs, revenues, or the cost
of the public utility's property used and useful, or to be used and useful
within a reasonable time after the test period, in providing the service
rendered to the public within this State, including its construction work in
progress, which is based upon circumstances and events occurring up to the time
the hearing is closed.

Information relating to the change(s) referred to above
relied upon by the applicant shall be filed with the Commission ten (10)
working days prior to the date that the testimony of the Public Staff and other
intervenors is due to be filed to the extent said change(s) are known by the
applicant at that time.

To the extent that additional information becomes available
subsequent to ten (10) working days prior to the filing of testimony by the
Public Staff and other intervenors, such information which will be offered to
support change(s) shall be made available to the Commission and other parties
as soon as practicable. Under such circumstances the Public Staff and other intervenors
shall have the right to address said evidence through additional direct
testimony, such option to be exercised at the discretion of the Public Staff
and other intervenors.

(d) Notice of General Rate Application and Hearing. —
Within thirty (30) days from the filing of any general rate case application by
any electric, telephone, or natural gas utility, such utility should provide
public notice to its customers in newspapers having general circulation in its
service area as follows:

(Public Utility)
filed a general rate application with the North Carolina Utilities Commission
on (date) requesting an increase in additional annual revenues of approximately
(Amount of proposed increase in dollars).

The Utilities
Commission will set a public hearing on the rate application within six months
from the date of filing and will require detailed Notice to the Public
regarding the proposed rates in advance of the Hearing.

The Commission will thereafter prescribe the form of Notice
to the Public in the Order scheduling the Hearing.

(e) Parties. — To the end that those affected by any
proposed increase in rates or charges may have every opportunity to be heard,
such persons may become parties to such proceedings as provided by Rule R1-6,
or as provided by Rule R1-19, or without filing formal pleading by entering
their appearances of record at the time the cause is called for hearing, as
provided by Rule R1-23, but matters settled at prehearing conferences or by
stipulations of parties, as provided in G.S. 62-69 will not ordinarily be set
aside or changed at the instance of those not parties of record at the time.

(f) Denial of Filing or Application for Failure
to Include Material Contents.

(1) The Commission on its own motion or at the
request of the Commission Staff, Public Staff, or any party in interest in any
general rate case shall review the filing or application within 15 days after
such filing and notify the applicant by letter of any additional information
needed to complete the filing under Rule R1-17, and give notice to the
applicant of the remedy provided by this rule for securing such information,
and give the applicant 5 days to file such additional information in
satisfaction of said letter request.

(2) If any material data or information
required by Rule R1-17 (b) is not filed with the tariff or application for rate
increase and is not secured after informal request as provided in Rule R1-17
(f)(1) above, the Commission on its own motion or on motion of the Commission
Staff, Public Staff, or motion of any party having an interest in the
proceeding made within 30 days after the filing of said tariff or application,
may order the utility to appear and show cause within a period of 20 days after
issuance of said order why said filing or application should not be denied for
failure to comply with any material provision of this rule, including the
filing of the contents of said application as prescribed under subsection (b)
above.

(3) Such order to appear and show cause why the
tariff filing or application should not be dismissed for failure to file
material contents thereof shall specify with particularity the alleged
deficiency or deficiencies in said tariff filing or application.

(4) Any utility company served with such a show
cause order shall have the right to file all of the data and information and
exhibits alleged as deficiencies in said show cause order at any time prior to
the hearing on said show cause order or at the hearing on said show cause order
and thus satisfy the show cause order, whereupon such show cause order shall be
dismissed before or at the hearing set thereon, and the proceeding on the
tariff filing or rate application shall proceed as in the case of a properly
filed tariff or application for a general rate increase.

(5) If the Commission shall find after notice
and hearing that the filing or application is incomplete and does not contain
material portions of the contents required under subsection (b) necessary for
complete determination of the justness and reasonableness of the rates filed or
applied for, and that the applicant has failed to file said material data and
information necessary for determination of the justness and reasonableness of
said rates after notice and opportunity to complete said filing as provided
herein, the Commission shall deny said application or dismiss said tariff
filing, without prejudice to the refiling of said application or tariff filing
with the complete contents prescribed herein.

(6) The Commission shall make its determination
on such show cause order within ten (10) days after the show cause hearing
provided in this subsection, and shall issue an order thereon dismissing the
show cause proceeding where such deficiencies are satisfied and continuing the
investigation of the application, or dismissing the filing or application for
material and unsatisfied deficiencies therein as provided in this subsection.

(1) Any public utility adopting the basic
retail rates of its wholesale electricity supplier under the provisions of G.S.
62-134(d), including each subsequent adoption of modified basic retail rates of
its wholesale supplier, shall within 30 days of such adoption file with the
Commission a Report of Adoption. The Report shall include the following as a
minimum:

(a) A balance sheet as of a date within three months of
the date of adoption.

(b) An income statement for the twelve months ending at
the date of the balance sheet.

(c) An estimate of the revenues to be produced by rates
that have been adopted.

(2) If the utility elects to adopt the monthly
adjustments in the retail fuel charge of its wholesale supplier, then it must
adopt decrease adjustments as well as increase adjustments. In such event, the
utility shall file with the Commission a letter notice of each such adoption
but is not required to file the Report of Adoption required under (i)(1) above.

(3) Filings of notice of adoption of basic rate
changes under (i)(1) above shall be accompanied by the filing fee required for
applications for rate increases but a filing fee is not required with monthly
notices of adoption of adjustments to fuel charges.

(4) A new docket number shall be assigned to
each filing under (i)(1) above. Subsequent monthly filings under (i)(2) above
shall be made in the same docket until a new basic rate increase docket is
established.

(j) Repealed.

(k) Procedure for Rate Adjustments Under G.S.
62-133.4.

(1) Purpose. The purpose of this Section (k) of
Rule R1-17 is to set forth the procedures by which local distribution companies
can file to adjust their rates pursuant to G.S. 62-133.4. The intent of these
rules is to permit LDCs to recover 100% of their prudently incurred gas costs
applicable to North Carolina operations.

(2) Definitions. As used in this Section (k) of
Rule R1-17, the following definitions shall apply:

(a) "LDC" shall mean local distribution
company.

(b) "Gas Costs" shall mean the total
delivered cost of gas paid or to be paid to Suppliers, including, but not
limited to, all commodity/gas charges, all direct, transaction-related costs
arising from an LDC’s prudent efforts to stabilize or hedge commodity gas
costs, demand charges, peaking charges, surcharges, emergency gas purchases,
over-run charges, capacity charges, standby charges, reservation fees, gas
inventory charges, minimum bill charges, minimum take charges, take-or-pay
charges, storage charges, service fees and transportation charges, and other
similar charges in connection with the purchase, storage or transportation of
gas for the LDC's system supply.

(c) "Suppliers" shall mean any person or
entity, including affiliates of the LDC, who locates, produces, purchases,
sells, stores and/or transports natural gas or its equivalent for or on behalf
of an LDC, or who provides hedging tools, including, but not limited to
financial tools, designed to stabilize the LDC’s commodity prices. Suppliers
may include, but not be limited to, interstate pipeline transmission companies,
producers, brokers, marketers, associations, intrastate pipeline transmission
companies, joint ventures, providers of Liquified Natural Gas, Liquified
Petroleum Gas, Synthetic Natural Gas and other hydrocarbons used as feed stock,
other LDCs and end-users.

(d) "Benchmark Commodity Gas Costs" shall
mean an LDC's estimate of the City Gate Delivered Gas Costs for long-term gas
supplies, excluding Demand Charges and Storage Charges as approved in the LDC's
last general rate case or gas cost adjustment proceeding. The Benchmark
Commodity Gas Costs may be amended from time to time as provided in Section
(k)(3)(a).

(e) "City Gate Delivered Gas Costs" shall
mean the total delivered Gas Costs to an LDC at its city gate.

(f) "Commodity and Other Charges" shall mean
all Gas Costs other than Demand Charges and Storage Charges and any other gas
costs determined by the Commission to be properly recoverable from sales
customers.

(g) "Demand Charges and Storage Charges"
shall mean all Gas Costs which are not based on the volume of gas actually
purchased or transported by an LDC and any other gas costs determined by the
Commission to be properly recoverable from customers.

(3) Rate Adjustments Under these Procedures.

(a) Sales Rates. In the event an LDC anticipates a
change in its City Gate Delivered Gas Costs, the LDC may apply and file revised
tariffs in order to increase or decrease its rates to its customers as
hereinafter provided. The Commission may issue an order allowing the rate
change to become effective simultaneously with the effective date of the change
or at any other time ordered by the Commission. If the Commission has not
issued an order within 120 days after the application, the LDC may place the
requested rate adjustment into effect. Any rate adjustment under this Section
(k)(3)(a) is subject to review under Section (k)(6).

(i) Demand Charges and Storage Charges. Whenever an
LDC anticipates a change in the Demand Charges and Storage Charges, the LDC may
(as hereinabove provided) change its rates to customers under all rate
schedules by an amount computed as follows:

(ii) Commodity and Other Charges. Whenever the LDC's
estimate of its Benchmark Commodity Gas Costs changes, an LDC may (as
hereinabove provided) change the rates to its customers purchasing gas under
all of its sales rate schedules by an amount computed as follows:

(b) Transportation Rate. Firm and/or interruptible
transportation rates shall be computed on a per unit basis by subtracting the per
unit Commodity and Other Charges included in the applicable firm or
interruptible sales rate schedule from the applicable firm or interruptible
rate schedule exclusive of any decrements or increments. Commodity deferred
account increments or decrements shall not apply to transportation rates unless
the Commission specifically directs otherwise. Demand and storage increments
or decrements shall apply to transportation rates.

(c) Other Changes in Purchased Gas Costs. The intent
of these procedures is to permit an LDC to recover its actual prudently
incurred Gas Costs. If any other Gas Costs are incurred, they will be handled
as in Section (3)(a)(i) if they are similar to Demand Charges and Storage
Charges, or as in Section (3)(a)(ii) if they are similar to Commodity and Other
Charges.

(4) True-up of Gas Costs.

(a) Demand Charges and Storage Charges. On a monthly
basis, each LDC shall determine the difference between (a) Demand Charges and
Storage Charges billed to its customers in accordance with the Commission-approved
allocation of such costs to the LDC's various rate schedules and (b) the LDC's
actual Demand Charges and Storage Charges. This difference shall be recorded in
the LDC's deferred account for demand and storage charges. Increments and
decrements for this deferred account, including the portion of the Commodity
and Other Charges true-up calculated under Section (4)(b) and apportioned to
this deferred account, flow to all sales and transportation rate schedules.
Where applicable, the percentage allocation to North Carolina shall be the
percentage established in the last general rate case.

(b) Commodity and Other Charges. On a monthly basis,
each LDC shall determine with respect to gas sold (including company use and
unaccounted for) during the month the difference between (a) the actual
Commodity and Other Charges incurred and (b) the actual Commodity and Other
Charges billed to customers. This difference shall be apportioned each month
to the LDC's deferred account for commodity and other charges based on the
ratio of volumes sold to the volumes purchased for that month. The residual
portion of the difference not apportioned to the LDC’s deferred account for
commodity and other charges shall be apportioned each month to the LDC’s
deferred account for Demand Charges and Storage Charges. Increments and
decrements for Commodity and Other Charges flow to all sales rate schedules.

(c) Repealed.

(d) Supplier Refunds and Direct Bills. In the event an
LDC receives supplier refunds or direct bills with respect to gas previously
purchased, the amount of such supplier refunds or direct bills will be recorded
in the appropriate deferred account, unless directed otherwise by the
Commission.

(5) Other.

(a) Gas Costs changes not tracked concurrently shall be
recorded in each LDC's appropriate deferred account.

(b) The Commodity and Other Charges portion of gas
inventories shall be recorded at actual cost and the difference in that cost
and the cost last approved under Section (k)(3)(a)(ii) shall be recorded in the
deferred account when the gas is withdrawn from inventory.

(c) Each LDC shall file with the Commission (with a
copy to the Public Staff) a complete monthly accounting of the computations
under these procedures, including all supporting workpapers, journal entries,
etc., within 45 days after the end of each monthly reporting period. All such
computations shall be deemed to be in compliance with these procedures unless
within 60 days of such filing the Commission or the Public Staff notifies the
LDC that the computations may not be in compliance; provided, however, that if
the Commission or the Public Staff requests additional information reasonably
required to evaluate such filing, the running of the 60 day period will be
suspended for the number of days taken by the LDC to provide the additional
information.

(d) Periodically, an LDC may file to adjust its rates
to refund or collect balances in these deferred accounts through decrements or
increments to current rates. In filing for an increment or decrement, the LDC
shall state the amount in the deferred account, the time period during which
the increment or decrement is expected to be in effect, the rate classes to
which the increment or decrement is to apply, and the level of volumes
estimated to be delivered to those classes. Any such increments or decrements
shall be made on a flat per dekatherm basis for all affected rate classes,
unless otherwise ordered by the Commission.

(e) Notwithstanding the provisions of this Rule, an LDC
may offset negotiated losses in any manner authorized by the Commission.

(6) Annual Review.

(a) Annual Test Periods and Filing Dates. Each LDC
shall file and submit to the Commission the information required in Section
(k)(6)(c) for an historical 12-month test period. This information shall be
filed by Toccoa Natural Gas on or before September 1 of each year based on a
test period ended June 30. This information shall be filed by Frontier Natural
Gas, LLC, on or before December 1 of each year based on a test period ended September
30. This information shall be filed by Piedmont Natural Gas Company, Inc., on
or before August 1 of each year based on a test period ended May 31. This
information shall be filed by Public Service Company of North Carolina, Inc.,
on or before June 1 of each year based on a test period ended March 31.

(b) Public Hearings. The Commission shall schedule an
annual public hearing pursuant to G.S. 62-133.4(c) in order to compare each
LDC’s prudently incurred Gas Costs with Gas Costs recovered from all its
customers that it served during the test period. The public hearing for Toccoa
Natural Gas shall be on the first Wednesday of November. The public hearing
for Frontier Natural Gas, LLC, shall be on the first Tuesday of March. The
public hearing for Piedmont Natural Gas Company, Inc., shall be on the first
Tuesday of October. The public hearing for Public Service Company of North
Carolina, Inc., shall be on the second Tuesday of August. The Commission, on
its own motion or the motion of any interested party, may change the date for
the public hearing and/or consolidate the hearing required by this section with
any other docket(s) pending before the Commission with respect to the affected
LDC.

(c) Information Required in Annual Filings. Each LDC
shall file information and data showing the LDC's actual gas costs, volumes of
purchased gas, weather-normalized sales volumes, sales volumes, negotiated
sales volumes and transportation volumes and such other information as may be
directed by the Commission. All such information and data shall be accompanied
by workpapers and direct testimony and exhibits of witnesses supporting the
information.

(d) Notice of Hearings. Each LDC shall publish a notice
for two (2) successive weeks in a newspaper or newspapers having general
circulation in its service area, normally beginning at least 30 days prior to
the hearing, notifying the public of the hearing before the Commission pursuant
to G.S. 62-133.4 and setting forth the time and place of the hearing.

(e) Petitions to Intervene. Persons having an interest
in any hearing held under the provisions of this Section (k) may file a
petition to intervene setting forth such interest at least 15 days prior to the
date of the hearing. Petitions to intervene filed less than 15 days prior to
the date of the hearing may be allowed in the discretion of the Commission for
good cause shown.

(f) Filing of Testimony and Exhibits by the Public
Staff and Intervenors. The Public Staff and other intervenors shall file direct
testimony and exhibits of witnesses at least 15 days prior to the hearing date.
If a petition to intervene is filed less than 15 days prior to the hearing
date, it shall be accompanied by any direct testimony and exhibits of witnesses
the intervenor intends to offer at the hearing.

(g) Filing of Rebuttal Testimony. An LDC may file
rebuttal testimony and exhibits within 10 days of the actual receipt of the
testimony of the party to whom the rebuttal testimony is addressed.

(a) Reparation Statements; Formal Claims for Reparation
Based upon Findings of the Commission. - When the Commission finds that
reparation is due, but that the amount cannot be ascertained upon the record
before it, the complainant should immediately prepare a statement showing
details of the utility charges on which reparation is claimed. The statement
should not include any utility charges not covered by the Commission's
findings, or any utility charges on which complaint was not filed with the
Commission within the statutory period. (See G.S. 62-132.) The statement,
together with the said bills on the utility charges, or true copies thereof,
should then be forwarded to the utility which collected the charges for
checking and certification as to its accuracy. The certificate must be signed
in ink by a general accounting officer of the utility and should cover all of
the information shown in the statement. If the utility which collected the
charges is not a defendant in the case its certificate must be concurred in by
like signature on behalf of a defendant.

(b) Applications of Transportation Companies to Award
Reparation or Waive Collection of Undercharges. - Whenever application is made
to the Commission with copies to the Public Staff to award reparation or waive
collection of undercharges on shipments that have moved between points in North
Carolina, in addition to full explanation in justification of said
applications, Form No. 1, at the end of this rule, shall be submitted also and
same shall be handled in manner outlined in the preceding subsection.

(NCUC Docket No. M‑100, Sub 75, 10/27/77.)

FORM NO. 1.

IMPORTANT.-Before
making out statement read Rule R1‑18 carefully.

Form No. 1. - Form
of Reparation or Waiver of Undercharge Statement Under Rule R1‑18.

Claim No. _ of
Richard Roe under the decision of the Utilities Commission in Docket No. _

For full text
of form, please see the 1995 Edition.

R1-19 INTERVENTION

(a) Contents of Petition. - Any person having an interest
in the subject matter of any hearing or investigation pending before the
Commission may become a party thereto and have the right to call and examine
witnesses, cross-examine opposing witnesses, and be heard on all matters relative
to the issues involved, by filing a verified petition with the Commission
giving the docket number and title of the proceeding and the following
information in separately numbered paragraphs:

(1) The correct name, post-office address and
electronic mailing address of the petitioner.

(3) A clear, concise statement of the nature of
the petitioner's interest in the subject matter of the proceeding, and the way
and manner in which such interest is affected by the issues involved in the
proceeding.

(4) A statement of the exact relief desired.

(b) When Filed. - Petitions under this rule shall be filed
with the Commission not less than 10 days prior to the time the proceeding is
called for hearing, unless the notice of hearing fixes the time for filing such
petitions, in which case such notice shall govern. A petition, which for good
cause shown was not filed within the time herein limited, and which neither
broadens the issues nor seeks affirmative relief, may be presented to and
allowed or denied by the presiding official, in his discretion, at the time the
cause is called for hearing.

(c) Copies Required. - See Rule R1-5, Subsection (g).

(d) Leave. - Leave to intervene filed within the time
herein provided, in compliance with this rule and showing a real interest in
the subject matter of the proceeding, will be granted as a matter of course,
but granting such leave does not constitute a finding by the Commission that
such party will or may be affected by any order or rule made in the proceeding.
Failure of any party to file answer or reply to such petition for leave to
intervene does not constitute an admission of the facts stated in such petition,
nor a waiver of the right to move to dismiss said petition at the time the
cause is called for hearing for failure to comply with this Rule.

(e) Notices of Intervention by the Public Staff. - Notices
of Intervention by the Public Staff shall be deemed recognized without the
issuance of any order. As a general rule, Notices of Intervention by the
Public Staff need not be filed in advance of any hearing and appearances may be
made and noted at the hearing. If the Public Staff elects to do so, Notices of
Intervention may be filed in certain cases. The filing of testimony and
exhibits and otherwise complying with all other Rules and Regulations of the
Commission are not affected by this provision.

(a) Purpose. - Upon written notice by the Commission in any
pending proceeding, or by the chairman of the Hearing Division or any Hearing
Commissioner or Examiner to whom any such proceeding has been referred for
hearing, the parties or their attorneys may be directed to appear before the
Commission, or such Commissioner or Examiner, at a time and place designated in
such notice, for a conference for the purpose of formulating issues and
consideration of:

(1) The simplification of issues;

(2) The necessity or desirability of amending
the pleadings either for the purpose of clarification, amplification, or
limitation;

(3) The possibility of making admissions of
certain averments of fact or stipulations concerning the use by either or both
parties of matters of public record, such as annual reports and the like, to
the end of avoiding the unnecessary introduction of proof;

(4) The procedure at the hearing;

(5) The limitation of the number of witnesses;

(6) The propriety of prior mutual exchange
between or among the parties of prepared testimony and exhibits; and

(7) Such other matters as may aid in the
simplification of the evidence and disposition of the proceeding.

(b) Facts Disclosed Privileged. - All facts disclosed
during a prehearing conference shall be privileged and, unless agreed upon by
the parties involved and read into the stenographic record of the proceeding,
shall not be used against the participating parties either before the
Commission or elsewhere unless substantiated by other evidence.

Rule R1-21 CONDUCT OF HEARINGS AND INVESTIGATIONS

(a) Open to the Public. — All formal hearings and
investigations shall be open to the public.

(b) Notice.

(1) Proceedings in Which There Is Only One
Party. — In proceedings in which there is only one party, hearings may be held
at any time convenient to the Commission and to the party to the proceeding,
with or without a public notice, in the discretion of the Commission.

(2) Posting of Notice. — In addition to other
notice of hearings required by statute, notice of the date and place of all
public hearings shall be posted on the bulletin board in the Office of the
Chief Clerk of the Commission at least ten (10) days in advance of the date set
for the hearing. Notice of all postponements of such hearings shall immediately
be posted on said bulletin board.

(3) Publication of Notice. — In formal
proceedings the Commission may, at its discretion, in addition to other notice,
give or require to be given general notice of the substance of the application,
petition, or complaint and the date and place of the hearing in a newspaper, or
newspapers, for such length of time as the Commission may designate.

(4) Mailing Lists. — General mailing lists for
copies of applications, petitions, protests, notices or orders will not be
maintained but persons interested in specific matters under investigation
should request the Commission to place their names on the mailing lists in connection
with such specific matters.

(c) Motions. — Any motion made at the instance of an
adverse party, the granting of which will summarily terminate a hearing of a
cause, or necessitate the postponement of the same, must be filed with the
Commission in writing at least ten (10) days before the date set for the
hearing, which motion shall certify that a copy thereof has been served upon
each party of record in the cause, or upon their attorneys of record in
accordance with Rule R1-39. This rule shall not apply to motions which
necessarily arise during the course of the hearing to which they relate.

(d) Procedure at Hearings. — Hearings shall be conducted by
and before the Full Commission, Commission Panel, Commissioner or Examiner as
provided in G.S. 62-76, and except as otherwise directed in the particular
case, the presiding Commissioner or Examiner:

(1) Shall call the proceeding for hearing,
giving the title of the proceeding, its docket number, and the nature and
purpose of the hearing;

(2) Shall cause to be entered in the record the
kind of notice given of the time, place, and nature of the hearing, and the
date or dates such notice was given;

(3) Shall take the appearances, which shall be
filed in writing with the court reporter and shall also be stated orally for
the record.

(e) Order of Receiving Evidence. — Unless otherwise
directed by the presiding Commissioner or Hearing Examiner, evidence will
ordinarily be received in the following order:

(1) Upon investigation on motion of the
Commission: (i) Commission Staff, (ii) Public Staff, (iii) Respondent, and (iv)
rebuttal by Commission Staff or Public Staff.

(6) Upon order to show cause: (i) Commission
Staff, (ii) Public Staff, (iii) Respondent, and (iv) rebuttal by Commission
Staff.

(f) Testimony by Public Staff or Commission Staff.

(1) Investigations made by the Public Staff or
Commission Staff in any pending proceeding shall be reported to the Commission
in writing, a true and correct copy of which shall be filed with the official
records of the proceeding at least twenty (20) days prior to the hearing of the
cause, and may be inspected by any party to the proceeding or by any other
person.

(2) Such report may be offered in evidence by
any party to the proceeding, or by the Commission, subject to the same rules of
evidence that apply to other exhibits offered in evidence.

(g) Public Witness Testimony.

(1) Witnesses must register his or her name on
a sign-up sheet in the hearing room prior to his or her testimony.

(2) After calling the hearing to order as
provided in section (d), the presiding Commissioner or Examiner shall outline
the procedure to be followed for testimony and shall establish hearing room
decorum standards.

(3) Witnesses will be called according to the
order of registration on the sign-up sheet. The presiding Commissioner or
Examiner reserves the right to re-order the witnesses in order to provide the
Commission with a full spectrum of opinions and ideas.

(4) Each witness shall state his or her name
and address and the association, if any, that he or she represents at the time
of his or her testimony. The presiding Commissioner or Examiner may limit the
scope of the testimony to matters specified in the notice of public hearing.

(5) To allow each witness an equal amount of
time to testify or to prevent cumulative, repetitive, irrelevant or unnecessary
testimony, the presiding Commissioner or Examiner may establish time limits for
the presentation of testimony within his or her discretion and may limit
testimony to five minutes or less per witness.

(6) Any witness testifying may extend his or
her remarks in written form, but written testimony must be submitted at the
time of his or her oral testimony at the public hearing. Any witness may submit
written testimony in lieu of oral testimony, but any written testimony must be
submitted by the witness during the public hearing and subject to
cross-examination.

(7) Only one witness may testify at a time and
shall refrain from testifying to matters not specified in the notice of public
hearing. Witnesses are providing testimony to the Commission and should not
address non-Commission participants in the hearing room and may not ask
questions. As testimony must be recorded, the presiding Commissioner or
Examiner may limit unconventional modes of testimony to ensure accuracy of the
record.

(8) To allow all witnesses to be heard and
properly transcribed by the court reporter, the presiding Commissioner or
Examiner shall have the right to instruct the removal of any member of the
audience attempting to participate either verbally or visually during
testimony. Members of the audience shall not bring signs or placards into the
hearing room.

(9) The presiding Commissioner or Examiner, at
his or her discretion, may modify the rules for public witness testimony.

(h) Transcript. — The transcript of matters heard before
the Commission or before an Examiner shall contain the docket number, date of
hearing, title of the cause, testimony offered, objections, rulings on
objections, exceptions, and such motions, rulings, and orders as may be made
during the course of the hearing. Unless directed by the Commission or the
Examiner, the reporter's transcript of the proceedings shall not include oral
arguments or contentions of the parties. Copies of transcripts will not be
furnished parties unless written order therefor shall have been given to the
court reporter prior to or at the close of the hearing.

(i) Discussion Pending Decision. — After the close of the
hearing it is improper for the parties to discuss the case with the Commission
pending the decision, or to induce others to do so by letter, wire, or by any
other means. G.S. 62-70 prohibits ex parte contacts without notice to all other
parties.

(j) Notice of Orders and Decisions. — When an order or
decision of the Commission, or the report and recommended order of an Examiner,
as the case may be, is ready to be made and entered in the cause, copies
thereof shall be mailed, delivered or transmitted by electronic mail to all
parties to the proceeding or their attorneys. Copies to parties against whom
such order or decision runs shall be under seal of the Commission and shall be
mailed to such parties by registered or certified mail unless the Commission
shall direct service by some other means authorized by law. Any party against
whom such order or decision runs may consent to service of those orders or
decisions by electronic mail in lieu of being served personally or by
registered or certified mail by filing a written waiver and consent to receive
service by electronic mail with the Clerk; provided, such consent shall remain
effective until thirty days after the party has notified the Commission in
writing that its consent to receive service by electronic mail has been
revoked. The Commission may serve other parties to the proceeding by first
class mail or electronic mail. (G.S. 62-63 and G.S. 62-79.)

(a) In all proceedings wherein pleadings are filed and a
formal hearing is held involving the taking of testimony and the formulation of
a record subject to review by the courts, no person may appear in a
representative capacity other than an attorney at law, duly qualified and
entitled to practice before the Supreme Court of the State of North Carolina.
(See G.S. Ch. 84.)

(b) This rule does not limit the right of any individual to
plead his own cause before the Commission and to call and examine witnesses in
his own behalf, and to cross‑examine the opposing witnesses. Neither does
this rule limit the right of any individual, whether called as a witness or
not, to testify in any hearing or investigation before the Commission with
respect to facts pertinent to the issues involved.

R1-23 APPEARANCES

Parties shall enter their appearances in proceedings before
the Commission at the time the cause is called for hearing by giving their
names and addresses in writing to the reporter, who will include the same in
the record of the proceeding. Appearance may be made on behalf of any party by
counsel, and thereafter all notices, pleadings and orders in the cause may be
served upon such counsel, and such service upon counsel shall be considered
valid service for all purposes upon the party represented by such counsel. Counsel
making an appearance on behalf of any party shall give their name, post office
address and an electronic mailing address to the reporter, who will include the
same in the record of the proceeding. The Commission may, in addition, require
appearances to be stated orally, so that the identity and interest of all
parties may be made known to those present and having an interest in the
subject matter of the proceeding.

(NCUC Docket No. M-100, Sub 134, 3/11/10.)

04 NCAC 11 R01-24 EVIDENCE

(a) Admissibility, Generally. — Any evidence admissible
under the General Statutes of North Carolina, or under the rules of evidence
applicable in civil actions in the superior court of this State, will be
admissible in investigations and hearings before the Commission.

(b) Judicial Notice. — The provision with respect to
judicial notice set forth in G.S. 62‑65(b) will apply to investigations
and hearings before the Commission.

(c) Stipulations. — The parties to any proceeding or
investigation before the Commission may, by stipulation in writing filed with
the Commission or entered in the stenographic record at the time of the
hearing, agree upon the facts or any portion thereof involved in the
controversy, which stipulations shall be binding upon the parties thereto and
may be regarded and used by the Commission as evidence at the hearing. It is
desirable that the facts be thus agreed upon whenever practical. The Commission
may, however, require proof by evidence of the facts stipulated to, notwithstanding
the stipulation of the parties.

(d) Prepared Statements. — A witness may read into the
record as his testimony statements of fact prepared by him, or written answers
to questions of counsel; provided, such statements shall not include argument;
provided, further, that before such statements are read or offered in evidence
a copy thereof shall be delivered to the presiding officer, a copy to the
reporter, and copies to opposing counsel, as may be directed by the presiding
officer. The admissibility of such written statements or questions and answers
shall be subject to the same rules as if such testimony were produced in the
usual manner.

(e) Abstracts of Documents. — When documents are numerous,
such as freight bills or bills of lading, and it is desired to offer in
evidence more than a limited number of such documents as typical of the others,
an abstract in an orderly manner of the relevant data from such documents shall
be prepared and offered as an exhibit, giving other parties to the proceeding reasonable
opportunity to examine both the abstract and the documents.

(f) Exhibits, Generally.

(1) Size and Identification. — It is desirable,
when practical, that exhibits be on paper of uniform size not exceeding 8½” x
14", and that each exhibit be distinguished from other exhibits by a short
title descriptive of the subject matter of the exhibit, by an identification
number or letter and by the name of the witness, and that all exhibits produced
by a single witness be assembled and bound together, properly indexed, and
offered as a single exhibit.

(2) Records and Documents. — For the purpose of
identification and for the purpose of the record on appeal, all records or
documents in the files of the Commission and other matters of a documentary
nature when offered and admitted in evidence must be read into the stenographic
record of the proceeding, or a true copy thereof offered as an exhibit. Records
or documents of more than one hundred words must be offered in the form of an
exhibit.

(3) Copies. — Not less than an original plus
thirty (30) copies of each exhibit shall be provided for the use of the
Commission, with an extra copy for each party to the proceeding, unless the
Commission shall require a larger number in the particular case.

(g) Exhibits by Expert Witnesses.

(1) Proposed Initial Direct Testimony to Be
Reduced to Writing. — The proposed initial direct testimony of an expert
witness, including accountants, auditors and engineers, in rate cases and in
other proceedings involving detailed and complicated computations, audits, cost
studies, appraisals, tables of figures, graphs, charts, drawings, and other
exhibits of a similar nature, shall be reduced to writing, which shall include
a brief statement in narrative form of the qualifications of such witness
(training and experience), and that the exhibits proposed to be offered in
evidence were prepared by or under the direction of such witness. The witness
shall explain in writing each exhibit in such detail as to make the same
understandable.

(2) Time of Filing. — The testimony for the
applicant of such expert witnesses shall be filed with the Commission at least
sixty (60) days prior to the date set for the hearing in general rate cases,
and at least thirty (30) days prior to the date set for the hearing in all
other cases. Testimony for Protestants of such expert witness in rebuttal shall
be prepared in the same manner and form, and shall be filed with the Commission
at least ten (10) days prior to the date fixed for the hearing. When filed, all
such exhibits shall be made available immediately to adverse parties of record,
and to others having an interest in the proceeding. Class A & B electric,
telephone and natural gas utilities shall file with and at the time of any
general rate application all testimony, exhibits and other information which
any such utility will rely on at the hearing on such increase. All water and
sewer utilities shall file 45 days prior to the hearing on the general rate
case application all testimony which such utility will rely on. Class A and B
water and sewer utilities shall file with the application all exhibits
supporting the general rate increase. The Staff, Attorney General and all other
Intervenors or Protestants shall file all testimony, exhibits and other information
which is to be relied upon at the hearing 20 days in advance of the scheduled
hearing.

(3) Copies Required. — An original plus thirty
complete copies of the testimony of each expert witness, as required by this
rule, shall be filed with the Commission for its use.

(4) Procedure at Hearing. — The testimony of an
expert witness, prepared and submitted as provided by this rule, may be
identified by the witness, offered in evidence, and made a part of the record
without further formality or further explanation, and the witness immediately
tendered for cross‑examination; provided, that any party to the
proceeding shall have the right to object to or move to strike all or any part
of such testimony by filing such objection or motion with the Commission in
writing at least five (5) days prior to the date fixed for the hearing;
provided further, that if upon such objection or motion all or any part of the
proposed testimony is excluded, the party offering the same shall be allowed to
offer other testimony in lieu of that excluded by the same or other witnesses
without the necessity of advance filing.

(5) Relief from Subdivisions (1) to (4). —
Relief from the provisions of subdivisions (1) to (4) of this subsection may be
granted by the Commission, after notice of hearing and before the date of
hearing, in cases in which it appears by stipulation of counsel for the
respective parties that the oral testimony or exhibits of expert witnesses will
not be of such technical or complicated nature as to warrant a recess of the
hearing for study and preparation of cross‑examination.

(h) Subpoenas. — Subpoenas may be issued by the Commission
on its own motion for the attendance of witnesses or for the production of
books, records, and documents considered necessary for the information of the
Commission, and may be issued at the instance of a party to the proceeding upon
written request therefor; provided, that the request for the production of
books, papers, records, and documents shall specify the books and records desired
and purpose for which the same are desired.

(i) Letters, Telegrams and Petitions. — G.S. 62‑65
requires the Commission to adhere to the rules of evidence applicable to civil
actions in the superior court, insofar as practicable. Letters, telegrams and
petitions sent to the Commission concerning matters pending before it for
hearing violate the rules of evidence, and sending such communications to the
Commission, or inducing others to do so, will not be looked upon with favor by
the Commission.

(j) Numbering of Testimony Lines. — Each individual sheet of
testimony and, where practical, exhibits and other supporting materials, of all
parties shall have each line numbered in the left-hand margin and shall be
punched to fit a three-ring binder. Written testimony shall also comply with
the requirements of Rule R1-5(c).

(a) Any party of record, including the Public Staff, to a
proceeding before the Commission, Commission Panel, or before a Hearing
Examiner shall, upon request of the presiding Commissioner or Examiner, file
proposed findings of fact, conclusions of law, and brief in the cause on all
issues. The Presiding Officer shall fix the time within which to file such
proposed findings, conclusions and briefs at the hearing or thereafter, and no
decision, report, or recommended order shall be made in the cause until after
the expiration of the time so fixed.

(b) Contents. — Each proposed finding of fact shall be
clearly and concisely stated and numbered. Such statement shall be followed by
one or more paragraphs which shall set out or specifically refer to the
testimony supporting such proposed findings of fact.

(c) Form; Copies Required. — Rule R1-5, subsections (c) and
(g) shall apply to the filing of briefs, proposed findings of fact, and
conclusions of law. Unless filed electronically pursuant to Rule R1-28, the
parties shall also file a copy of their briefs, proposed findings of fact, and conclusions
of law via electronic mail addressed to briefs@ncuc.net attaching editable
noncompressed files in Microsoft Word or ASCII Text format. The Commission may
waive the electronic filing requirement for good cause shown.

(d) Summary Statements. — Pursuant to G.S. 62-15(g) the
Public Staff shall in all general rate cases provide to the Commission fifteen
(15) days after the close of all general rate hearings Summary Statements and
schedules in comparative form setting forth the position of the applicant, the
Public Staff and such other intervenors as may be required, with regard to all
material facts and matters of which the Public Staff has knowledge or is aware
which must or should be considered in determining a public utility's cost of
service and/or in the fixing of just and reasonable rates.

With regard to matters at issue, the Summaries shall include
such schedules and written narrative explanation so as to clearly and
completely show and convey reconciliation of the difference between the parties
to the proceeding.

The above mentioned Summary Statements, schedules and
reconciliations shall include, but not be limited to, the following:

(3) Total company capitalization including
absolute dollar amounts and ratios. Also show the annualized embedded cost of
debt, the preferred dividend requirement, the end-of-period return on common
equity and the end-of-period overall rate of return under present and company
proposed rates;

(4) Calculations of current and deferred state
and federal income tax expense; and

R1‑26 RECOMMENDED DECISION OF COMMISSION PANEL,
HEARING COMMISSIONER OR AN

EXAMINER

(a) Contents. - A Commission Panel, Hearing Commissioner or
Examiner to whom a matter has been referred for hearing, as provided in G.S. 62‑76
shall include the following in the report to the Commission:

(1) The docket number and title of the
proceeding.

(2) The time and place of the hearing.

(3) The appearances entered at the hearing.

(4) A concise statement of the issues, or of
the relief sought.

(5) Findings of fact set forth separately.

(6) Conclusions of law.

(7) A recommended order in the cause.

(b) Service. - Copies of the report shall be served upon
counsel of record for the parties who have appeared in the proceeding, or if not
represented by counsel, then upon the parties.

(c) Exceptions. - Every report and recommended order made
by a Commission Panel, a Hearing Commissioner or an Examiner shall fix a time
not less than fifteen (15) days from the receipt thereof by the parties to the
proceeding within which any party to the proceeding may file exceptions to such
report and recommended order, and no report and recommended order shall become
effective until the expiration of the time so fixed for the filing of
exceptions, and if exceptions are filed within the time allowed, the report and
recommended order shall be automatically suspended pending the ruling and order
of the Commission on said exceptions.

Each exception shall be numbered and shall plainly and
concisely state in a separate paragraph without unnecessary repetition and
without argument the precise matter to which exception is taken. Arguments,
explanations, excerpts from court decisions or references to other pertinent
matters may be stated in one or more paragraphs following the statement of the
exception.

Exceptions shall be typewritten or printed and filed with
the Commission in triplicate, and shall show by certificate or statement that a
copy thereof has been mailed or delivered to each party of record in the case
and to their counsel.

The time within which any pleading, motion, notice, brief,
or exceptions may be filed, or the time within which any act is required to be
performed or may be performed, as provided by any rule or order of the
Commission, shall be so computed as to exclude the first day and include the
last day; provided, that when the last day of any such period falls on
Saturday, Sunday, a legal holiday under the laws of this State, or a day on
which the offices of the Commission for any reason are not open for business, the
computation of time shall omit such day and begin on the first day thereafter
which does not fall on any such day. (Not applicable in the computing of time
for filing transportation tariffs and minimum rate schedules. See Rule R4-10.)

(NCUC Docket No. M-100, Sub 3, 7/30/64.)

R01-28 GIVING NOTICE
OR FILING PAPERS WITH THE COMMISSION BY MAIL; ELECTRONIC FILING

(a) Any notice, motion, pleading, or other document or
paper may be filed with or served on the Commission by hand delivery, courier
service, or United States mail, unless required by statute to be filed or
served by some other means, but the same shall not be deemed filed or served
until the day and date actually received at the office of the Commission in
Raleigh. Rule R1-27 also applies to giving notice of filing papers by mail. In
addition, any notice, motion, pleading, or other document may be electronically
filed with the Commission using the Commission’s online electronic filing
system.

(b) An electronic filing may consist of one or multiple
files, but all of the files in a filing must be either public or confidential
and the filing so marked when made electronically. Except as provided in
Section (e) below, do not file paper copies of documents that are filed
electronically. Other provisions of any statute, rule, or order regarding the
content and format of specific filings remain applicable.

(c) If filed electronically, post-hearing briefs, proposed
findings of fact, and conclusions of law shall be filed in noncompressed
editable Microsoft Word or ASCII Text format; where possible, all other
documents filed electronically should also be filed in a noncompressed editable
or searchable format rather than in an image file format.

(d) The typed characters representing the name of a person
shall be sufficient to show that such person has signed the pleading or other
document for purposes of electronic filing. Verification pages, when required,
shall be printed, signed, notarized, converted to an electronic format, and
included in the electronic filing as a separate file.

(e) The following documents should be filed electronically;
provided, however, fifteen (15) paper copies of the entire filing, one of which
shall be single-sided, must be provided to the Commission on the following
business day in lieu of the number of copies required pursuant to the
applicable statute, rule, or order. If such filing is made electronically on
the day of or day before a hearing on the matter, the paper copies shall be
provided to the Commission no later than one (1) hour prior to the scheduled
start of the hearing. The failure to provide the required number of paper
copies within the prescribed timeframe may result in the electronic filing
being rejected and excluded from the record in that proceeding.

(1) For all Class A and B electric, telephone,
natural gas, water, and sewer utilities, applications for or filings of a
general increase in rates, fares, or charges for revenue purposes or to
increase the rate of return on investment or to change transportation rates,
fares, etc. pursuant to Rule R1-17, and all testimony and exhibits of
expert witnesses filed by any party to the general rate case proceeding.

(2) For all Class A and B electric utilities,
applications for changes in rates in annual rate rider proceedings pursuant to
G.S. 62-133.2, 62-133.8, and 62‑133.9, and Rules R8‑55, R8-67, and
R8-69, and all testimony and exhibits of expert witnesses filed by any party to
such proceeding.

(3) For all Class A and B natural gas
utilities, applications for changes in rates in annual prudency review
proceedings pursuant to G.S. 62-133.4 and Rule R1‑17(k), and all
testimony and exhibits of expert witnesses filed by any party to such
proceeding.

(4) Other documents, such as testimony and
exhibits of expert witnesses, as ordered in specific proceedings.

(f) Fingerprint cards and criminal history record release
forms required to be filed by applicants for certificates of exemption to
transport household goods pursuant to G.S. 62‑273.1 and Rule R2‑8.1
may not be filed electronically, but must be filed on paper pursuant to Section
(a).

(g) Reports on performance results required to be filed by
local exchange telephone companies and competing local providers pursuant to
Rule R9-8(d) may be filed electronically, provided that an electronic copy in
Excel is also provided to the Public Staff. The electronic copy in Excel may be
emailed to the Public Staff at communications@psncuc.nc.gov.

(h) Both paper and electronic filings must be received by
the Commission by 5:00 p.m. Eastern time to be considered to be filed on
that business day. A filing may be made electronically at any time, but filings
submitted after 5:00 p.m. Eastern time are considered to be filed on the
next business day. A filing that does not comply with all applicable statutes,
rules, or orders may be rejected, unless the filing is accompanied by a motion
requesting a waiver of the applicable requirement of a rule or order and the
motion is granted. If a filing is rejected, the document is deemed not to have
been filed with the Commission. A filing that requires a filing fee is not
considered to be filed until the fee has been submitted to the Commission.

Service of any process, order, or notice required by statute
shall be deemed to have been made personally on the party to be served when a
true copy thereof under the seal of the Commission shall have been delivered to
the party to be served by an authorized agent of the Commission, or by mailing
the same to such party by registered or certified mail. (G.S. 62-63.)

R1‑30 DEVIATION FROM RULES

In special cases, the Commission may permit deviation from
these rules insofar as it finds compliance therewith to be impossible or
impracticable.

(a) Pursuant to the provisions of G.S. 62-36 relating to
annual reports by utilities, all public utilities doing business in the State of
North Carolina and subject to regulation as to franchises, rates or services by
the North Carolina Utilities Commission shall file annual reports of the
operations of said public utility as soon as possible after the close of the
calendar year, but in no event later than the 30th day of April of each year
for the preceding calendar year. Such annual reports shall be under oath and
shall be prepared on forms approved or furnished by the Utilities Commission
for the respective utility services offered by such companies; to wit, the
appropriate approved form respectively for electric service, telephone service,
water service, sewer service, natural gas service, motor carriers of household
goods, motor carriers of passengers, and common carriers by water. Where
prescribed by the forms furnished or approved by the Commission, such public
utilities shall make such annual reports in accordance with the classification
of such utility as prescribed by the instructions for said forms; to wit, Class
A, Class B, or Class C utility companies, or other classifications, for the
respective utility services. All operating data, financial statistics, and
other accounting and financial information required for said form shall be
furnished in accordance with the respective Uniform System of Accounts
prescribed for the said respective utility services, unless otherwise
specifically provided by the Commission. The Chief Clerk shall, immediately
upon the filing of any annual report, transmit the same to the Public Staff for
retention and use in accordance with its statutory duties.

(b) All such annual reports shall show the utility's total
operations. If the utility operates in other states in addition to North
Carolina, the report shall also show separately stated either the utility's
total operations in North Carolina or its total operations in intrastate
commerce in North Carolina. Any utility which elects to separately state its
total operations in intrastate commerce in North Carolina rather than its total
operations in North Carolina shall include therein any interstate operations
over which the Commission has rate-making jurisdiction.

(c) The separate statement of total operations in North
Carolina or of total operations in intrastate commerce in North Carolina may be
shown by supplementary addenda or by different colored insert pages in sequence
to the report of total operations. The underlying basis for all separations and
allocations used in obtaining the separate statement shall be given in
sufficient detail to permit analysis thereof by the Commission.

(d) In the case of public utilities which file annual
reports with federal agencies such as the Federal Energy Regulatory Commission,
Federal Communications Commission, or Department of Transportation, a copy of
said report to the federal agency will comply with this rule insofar as it
requires a report of total company operations; provided all said copies shall
contain supplementary addenda or different colored insert sheets in sequence
showing the required separate statement of total operations in North Carolina
or of total operations in intrastate commerce in North Carolina.

(e) The separate statement of total operations in North
Carolina or of total operations in intrastate commerce in North Carolina shall
show for the separately stated operations

(1) The original cost of the utility's plant
and equipment used therein,

(2) The portion of the cost thereof which has
been consumed by previous use recovered in depreciation expenses,

(3) The gross revenues derived therefrom,

(4) The operating and maintenance expenses,
actual investment currently consumed through depreciation, and taxes
attributable thereto, and

(5) The net utility operating income derived
therefrom.

(e1) In lieu of filing annual report forms furnished or approved
by the Commission, or otherwise filing any other information as provided for in
Sections (a) through (e) above, incumbent local exchange companies (ILECs) that
are price regulated under G.S. 62-133.5(a), and any carrier electing regulation
under G.S. 62-133.5(h), may instead satisfy all of their annual reporting
obligations by providing the following as soon as possible after the close of
the calendar year, but in no event later than the 30th day of April of each
year for the preceding calendar year:

(1) Publicly traded ILECs may provide the
Commission with a link to their annual filings with the SEC;

(2) ILECs that are not publicly traded may
annually file copies of their audited financial statements with the Commission;

(3) CLPs with COLR responsibilities that are
publicly traded may provide the Commission with a link to their annual filings
with the SEC; and

(4) CLPs with COLR responsibilities that are
not publicly traded may annually file copies of their audited financial
statements with the Commission.

(f) Common carriers of passengers and household goods will
be in compliance with the provisions of this rule by completing the annual
report form prescribed by the Commission.

(g) In addition to filing FERC Form No. 1 as revised by the
Federal Energy Regulatory Commission effective on February 5, 1982, for reports
to be filed on or before April 30, 1983, and for reports filed thereafter,
Electric Companies shall also file the following financial schedules in
addition to the revised FERC Form No. 1, or modify the revised FERC Form No. 1
schedules as follows:

(1) The following schedules previously included
in FERC Form No. 1 but not included in the revised FERC Form No. 1 shall
continue to be filed in Revised Form No. 1 and assigned the page numbers
indicated below:

(2) The schedule entitled "Charges for
Outside Professional and Consultative Services," which was Page 354 of
previous Form No. 1 shall be filed as Page 324 of revised Form No. 1, but the
previous $10,000 limit may be increased to $50,000.

(3) For Page Numbers 102 and 250 of revised
Form No. 1 the electric companies shall file the information requested by these
schedules instead of making reference to Securities and Exchange Commission
10-K Report Form.

(4) The limit of $5,000 required in Line Number
5 of Page 333 of revised Form No. 1 shall be decreased from $5,000 to $1,000.

(5) A column (e) entitled "Increase or
Decrease" shall be added to Pages 110-113 of revised Form No. 1.

(6) Columns (c) through (j) of Pages 214C-D of
previous Form No. 1 shall be added as Columns (c) through (j) of Page 224 of
revised Form No. 1. Column (c) of Page 224 of revised Form No. 1 shall be
changed to Column (k).

(7) The information requested in instruction
1.B of Page 106 of previous Form No. 1 which was omitted from Page 106 of
revised Form No. 1 shall continue to be provided on Page 106 of revised Form
No. 1.

(8) Page 337 of revised Form No. 1 shall be
filed based on the instructions for Page 304 of previous Form No. 1.

(9) Pages 350 and 351 of revised Form No. 1
shall be filed based on the instructions for Pages 353-353A of previous Form
No. 1.

(10) A summary of operation and maintenance
expenses shall be inserted on Page 323 of revised Form No. 1 in the same format
as contained on Page 420 of previous Form No. 1.

Pursuant to the provisions of G.S. 62-47, the annual reports
therein required to be filed by every municipality furnishing gas, electricity,
or telephone service shall be filed on a fiscal year basis for an annual
reporting period from July 1st of each year through June 30th of the succeeding
year. Beginning with the fiscal year July 1, 1964 — June 30, 1965, and
continuing thereafter, such municipal annual reports shall be filed as soon as
possible after the close of the fiscal year, but in no event later than
November 15th next following the end of said fiscal year. Each such annual
report of a municipality furnishing gas, electricity, or telephone service
shall be made upon annual report forms furnished or approved by the North
Carolina Utilities Commission for the respective service; to wit, the approved
annual report form for gas service, the approved annual report form for
electric service, and the approved annual report form for telephone service.
Such annual reports shall be verified by the oath of the general manager or
superintendent of such utility service in accordance with the requirements of
G.S. 62-47. The Chief Clerk shall, immediately upon the filing of any annual
report, transmit the same to the Public Staff for retention and use in
accordance with its statutory duties.

In any case where the provisions of this chapter require the
filing of a specific number of copies of any document and it appears that there
is no reasonable or substantial need for said specific number of copies of
documents under the procedures to be observed in the proceeding in which the
document is to be filed, or where it is not feasible for other reasons to
provide the specific number of copies, upon request of the party filing the
document or on its own motion, the Commission may authorize a lesser number of
copies by notifying the parties in writing of the number of copies to be filed.

R1‑35 USE OF ACCELERATED DEPRECIATION BY
ELECTRIC, WATER, SEWER, GAS AND TELEPHONE

UTILITY COMPANIES UNDER FEDERAL
TAX REFORM ACT OF 1969

(a) Electric, water, sewer, gas and telephone utility
companies operating in North Carolina are hereby authorized, but not required,
to use liberalized or accelerated depreciation and are authorized to normalize
the difference between the federal and State income taxes due with the use of
accelerated depreciation and the federal and State income tax which would be due
with the use of various straight‑line depreciation methods for their
regular books of account and for rate‑making purposes, to the extent such
accelerated depreciation and normalization thereof is authorized by Section 441
of the Federal Tax Reform Act of 1969 as enacted by Congress in December of
1969, subject to the terms and conditions provided in this rule.

(b) The accelerated depreciation and normalization of the
results thereof for accounting and rate‑making purposes shall be
authorized on all utility property which qualifies for accelerated depreciation
under Section 441 of the Federal Tax Reform Act of 1969.

(c) Utility companies using accelerated depreciation and
normalization thereof under this rule shall record deferred operating federal
income taxes in a temporary income account to be designated as "Operating
federal income taxes deferred - accelerated tax depreciation''; deferred
operating State income taxes in an account designated "Other operating
taxes''; deferred nonoperating federal income taxes in an account designated
"Federal income taxes - nonoperating taxes''; and deferred nonoperating
State income taxes in an account designated "Other nonoperating taxes'',
and contra credits shall be made to corresponding subdivisions of a temporary
balance sheet account to be designated "Reserve for accumulated deferred
income taxes - accelerated tax depreciation."

(d) The deferred federal and State income tax funds made
available temporarily by the adoption of such accelerated depreciation and normalization
thereof on the utility company books should be utilized by said utility company
for construction of utility plant, and in no event shall the same be
transferred to earned surplus.

(e) Any utility company which has used accelerated
depreciation with flow‑through methods of accounting as defined in
Section 441 of the Federal Tax Reform Act of 1969 is authorized, but not
required, to continue such flow‑through methods of accounting to the full
extent allowed under said Section 441 of the Federal Tax Reform Act of 1969.

(NCUC Docket No. M‑100, Sub 32, 5/28/70.)

R1‑36 Repealed by NCUC Docket No. E‑100,
Sub 47, 2/27/84.

R1-37 APPLICATION
FOR CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY BY QUALIFYING COGENERATOR
OR SMALL POWER PRODUCER; PROCEDURE THEREON; REPORTS OF CONSTRUCTION

Service of pleadings, motions, or other papers to parties of
record or to the attorney of record of such party, unless otherwise specified
by the Commission, shall be made by United States mail, first class or better; by
hand delivery; or by means of facsimile or electronic delivery upon agreement
of the receiving party. (NCUC Docket No. M‑100, Sub 133, 02/02/06.)

ARTICLE 1.

GENERAL.

R02-01 CARRIERS
REQUIRED TO OBTAIN AND KEEP COPY OF ACT AND COPY OF COMMISSION'S RULES

Every motor carrier shall keep at all times a copy of the
Public Utilities Act and these rules and regulations. Copies of same may be
obtained from the Commission.

(NCUC Docket No. M-100, Sub 140, 12/03/13.)

R2‑02 CERTIFICATE; VEHICLE IDENTIFICATION, ETC.

(a) Repealed.

(b) Repealed.

(c) Passengers, fire‑fighting equipment, medical and
hospital supplies, food, feed, clothing, and other articles necessary for
immediate relief of or direct prevention of fires, sickness, accident, storm,
flood, or similar catastrophes, may be transported by any person in any available
vehicle without notice to or authority from the Commission.

(d) Repealed.

(e) Repealed.

(f) Repealed.

(g) The lease of equipment with driver for use in private
transportation of property is prohibited unless the private carrier leases vehicle(s)
and driver(s) from a single source on an intrastate basis and the lease
contains the following requirements:

(1) the leased equipment must be exclusively
committed to the lessee's use for the term of the lease;

(2) the lessee must have exclusive dominion and
control over the transportation service during the term of the lease;

(3) the lessee must maintain liability
insurance for any injury caused in the course of performing the transportation
service;

(4) the lessee must be responsible for compliance
with safety regulations;

In the application of the insurance regulations of the
Commission under G.S. 62-260(f) and certificates of exemption under G.S.
62-260(g) the Commission deems that the term "motor carriers" as
included in said sections should be construed under the definition in G.S.
62-3(17) to be limited to motor common carriers or motor contract carriers of
exempt passengers for hire who have been issued certificates of exemption by
the Division of Motor Vehicles.

(a) No carrier authorized to operate as a common carrier of
household goods shall use any vehicle of which such carrier is not the owner
for the transportation of household goods for compensation, except under a bona
fide written lease from the owner, subject to the following conditions:

(1) The lessee shall use such vehicles only for
purposes and within the territory covered by his certificate of exemption and
for the term of the lease.

(2) The household goods transported shall be
transported in the name of and under the responsibility of the said lessee, and
under the direct supervision and control of the lessee.

(3) The drivers of said leased equipment shall
be directly supervised and controlled by lessee.

(4) The name, address, and certificate of exemption
number assigned to the lessee shall be displayed on the leased vehicle as
required by Rule R2‑26.

(5) The vehicle shall be covered by insurance
in the name of the lessee as required by Rule R2‑36.

(6) The lease shall specify a definite
effective period, the amount of consideration to the lessor, and shall list and
describe the equipment covered.

(7) A legible copy of the executed lease shall
be carried in the leased vehicle at all times, unless a certificate as provided
in subsection (a)(8) of this Rule is carried in lieu thereof.

(8) Unless a copy of the lease is carried on
the equipment as provided in subsection (a)(7) of this Rule, the authorized
carrier shall prepare a statement certifying that the equipment is being
operated by it, which shall specify the name of the owner, the date of the
lease, the period thereof, any restrictions therein relative to the commodities
to be transported, and the location of the premises where the original of the
lease is kept by the authorized carrier, which certificate shall be carried
with the equipment at all times during the entire period of the lease. Such
certificate shall be in the following form or on such other form as may be
submitted to and approved in advance by the Commission:

CERTIFICATE OF LEASE

This is to certify that this unit is being operated by _________________________________________

Period of Lease:
_____________________________________________________

Commodities
Authorized:______________________________________________

I hereby certify that the original lease is on file
at___________________________

____________________________________

(Name
of Authorized Operating Carrier)

BY:_________________________________

(Duly Authorized
Officer)

Exception: The provisions of this rule shall not
apply to the interchange of trailers.

(b) No common carrier of household goods shall lease its
equipment for private use in the transportation of commodities which it is
authorized to transport by authority of the Commission, and no common carrier
of household goods shall lease equipment with drivers to private carriers or
shippers under any circumstance.

R02-08.1 APPLICATIONS FOR CERTIFICATES OF EXEMPTION;
TRANSFERS, AND NOTICE

(a) For New Applications.

(1) Application to operate as a common carrier
of household goods must be made on forms furnished by the Commission, and all
the required exhibits must be attached to and made a part of the application.
The original and three (3) complete copies of the application, including
exhibits, must be filed with the Commission with a fourth copy for the Public
Staff's Transportation Division.

(2) The application shall be signed and sworn
to by the applicant. If the applicant is a partnership, one partner may sign
and verify for all; but the names and addresses of all partners must appear in
the application and a certified copy of the partnership agreement, as filed in
the county wherein the principal office of the partnership is located, must be
filed with the Commission. Trade names will not be allowed unless the names
and addresses of all owners are given. If the applicant is a corporation, a
duly authorized officer of the corporation must verify the application. The
names and addresses of all principals including the directors and officers for
the corporation or member-managers and nonmember managers for an LLC must be
given and a certified copy of the corporate charter filed with the
application. This does not alleviate the responsibility that all the partners
or principals are required to individually submit completed "Authority for
Release of Information" forms allowing use of principal's fingerprints for
a criminal history records check, pursuant to G.S. 114-19.32, and citizen
certifications or employment authorization as set forth in Rule R2-8.1(a)(3)(F
and G).

(3) Pursuant to G.S. 62-261(8), the applicant
shall provide proof or certification of the following:

a. That the applicant is fit, willing, and able to
properly provide the transportation of household goods in intrastate commerce
and has a reasonable and adequate knowledge of the moving industry;

b. That the applicant is financially solvent and able
to furnish adequate service on a continuing basis, including adequate insurance
protection, maintenance of safe, dependable equipment, and the financial
ability to settle any damage claims for which it is liable;

c. That the applicant maintains minimum limits of
liability insurance coverage of $100,000/$300,000/$50,000, or such higher
amount as may be required by federal law, and cargo insurance coverage of
$35,000/$50,000; and

d. That the applicant maintains a minimum amount of
$50,000 general liability insurance coverage.

e. That the applicant certifies that only persons
possessing valid driver's licenses will operate the motor vehicles that will be
used for transporting household goods;

f. That the applicant or each of its
partners/principals shall submit (i) a completed Fingerprint Card with
fingerprints that have been taken and imprinted by a law enforcement agency;
(ii) a completed "Authority for Release of Information" form signed
by principal consenting to use of his or her fingerprints for a criminal
history records check; (iii) a money order or cashier's check in the amount due
for criminal history records checks ($38.00 per principal or as subsequently
modified by the Commission), made payable to the "North Carolina
Department of Commerce/Utilities Commission," to cover the Commission's
direct cost of obtaining a criminal history records check; and

g. That the applicant or all its partners/principals
certifies that he or she (1) is a United States citizen or (2) if not a United
States citizen, to submit employment authorization document(s) proving legal
status to work within the United States.

(b) For Approval of Sale, Lease, or Other Transfer of
Certificate of Exemption. (Also see Rule R2-9.)

(1) Application for approval of sale, lease, or
other transfer of certificate of exemption shall be typewritten, shall be filed
with the Commission with a copy to the Public Staff, by providing an original
and three (3) copies. Such applications may necessarily differ according to the
nature of the transaction involved, but must include the following:

a. The names and addresses of all parties to the
transaction.

b. A full and complete explanation of the nature of
the transaction and its purpose.

c. That the applicant or all its partners/principals
complete the requirements set forth in R2-8.1(a)(3).

(2) If the application is for approval of a
lease of certificate of exemption, a copy of the proposed lease agreement must
be filed with the application and must contain the entire agreement between the
parties.

(3) If the application is for approval of a
sale of certificate of exemption, a copy of the proposed sales agreement must
be filed with the application and must contain the entire agreement between the
parties, including the purchase price agreed upon, and all the terms and
conditions with respect to the payment of same.

(4) No sale of a certificate of exemption will
be approved unless the seller complies with the provisions of G.S. 62-111 by
filing a statement under oath, as therein required, with respect to debts and
claims; a statement showing gross operating revenues and total number of miles
traveled for the latest three months' period preceding the date of filing the
application, or for the latest three months' period preceding the date of
authority to suspend operations, if theretofore granted by this Commission; and
no such sale will be approved unless the purchaser files with the Commission a
statement under oath attesting to his fitness and ability to provide household
goods transportation service and of his assets and liabilities from which it
must appear that the purchaser is solvent and in financial condition to meet
such reasonable demands as the business may require.

(5) If the transferee is a corporation, a
certified copy of its corporate charter must be filed with said application
unless same is already on file with the Commission.

(6) If the application is for approval of a
merger of two or more carriers, or of any agreement by which one carrier seeks
to acquire an interest in or control over another carrier, the application
shall set out the purpose of such merger, combination or agreement, and the
extent of any transfers of other properties of the carriers involved, the
changes in the financial status and obligations of the individual carriers involved,
and all other matters necessary to a full understanding of the transaction and
its effect upon other motor carriers.

(c) Notice of Application and Hearings.

(1) Upon receipt of an application for a
certificate of exemption for the transportation of household goods, same shall
be made available for review on the Commission's website. Any party desiring
to file a protest must do so in writing by setting forth the reasons for the
protest and filing that protest with the Commission no later than 15 days from
the filing date of the application. Protests may be filed based only upon the
applicant's fitness or financial solvency.

(2) If no protests are filed to the application
within the 15-day time period provided for in Rule R2-8.1(c)(1), or as extended
by order of the Commission, the Commission may proceed to decide the
application on the basis of information contained in the application and such
additional information as the Commission may choose to obtain.

Rule R2‑8. Applications
for certificates of public convenience and necessity; transfers; and notice.

(a) For Operating Authority.

(1) Application for authority to operate as a
common carrier must be made on forms furnished by the Commission, and all the
required exhibits must be attached to and made a part of the application. The
original and three (3) complete copies of the application, including exhibits,
must be filed with the Commission with a copy to the Public Staff. The original
and the copies shall be fastened separately. A filing fee as set forth in G.S.
62‑300 must accompany the application before it is considered as being
filed.

(2) The application shall be signed and sworn
to by the applicant. If the applicant is a partnership, one partner may sign
and verify for all; but the names and addresses of all partners must appear in
the application and a certified copy of the partnership agreement, as filed in
the county wherein the principal office of the partnership is located, must be
filed with the Commission. Trade names will not be allowed unless the names and
addresses of all owners are given. If the applicant is a corporation, a duly
authorized officer of the corporation must verify the application. The names
and addresses of the principal managing officers of the corporation must be
given and a certified copy of the corporate charter filed with the application.

(b) For Approval of Sale, Lease, or Other Transfer of
Operating Authority. (Also see Rule R2‑9.)

(1) Application for approval of sale, lease, or
other transfer of operating authority shall be typewritten, shall be filed with
the Commission with a copy to the Public Staff, by providing an original and
three (3) copies and shall be accompanied by a filing fee as set forth in G.S.
62‑300. Such applications may necessarily differ according to the nature
of the transaction involved, but must include the following:

(A) The names and addresses of all parties to the transaction.

(B) A full and complete explanation of the nature of the
transaction and its purpose.

(2) If the application is for approval of a
lease of operating rights, a copy of the proposed lease agreement must be filed
with the application and must contain the entire agreement between the parties.

(3) If the application is for approval of a
sale of operating rights, a copy of the proposed sales agreement must be filed
with the application and must contain the entire agreement between parties,
including (i) an accurate description of the operating rights and other
property to be transferred, and (ii) the purchase price agreed upon, and all
the terms and conditions with respect to the payment of the same.

(4) No sale of a certificate will be approved
unless the seller complies with the provisions of G.S. 62‑111 by filing a
statement under oath, as therein required, with respect to debts and claims; a
statement showing gross operating revenues and total number of miles traveled
for the latest three months' period preceding the date of filing the
application, or for the latest three months' period preceding the date of
authority to suspend operations, if theretofore granted by this Commission; and
no such sale will be approved unless the purchaser files with the Commission a
statement under oath of his assets and liabilities from which it must appear
that the purchaser is solvent and in financial condition to meet such
reasonable demands as the business may require.

(5) If the transferee is a corporation, a photostatic
copy or certified copy of its corporate charter must be filed with said
application unless same is already on file with the Commission.

(6) If the application is for approval of a
merger of two or more carriers, or of any agreement by which one carrier seeks
to acquire an interest in or control over another carrier, the application
shall set out the purpose of such merger, combination or agreement, and the
extent of any transfers of operating rights or other properties of the carriers
involved, the changes in the financial status and obligations of the individual
carriers involved, and all other matters necessary to a full understanding of
the transaction and its effect upon other motor carriers.

(c) Notice of Application and Hearings.

(1) Upon receipt of an application for a
certificate for the transportation of household goods, same shall be set for
hearing and at least twenty (20) days' notice shall be given in the
Commission's calendar of truck hearings, a copy of which shall be mailed to applicant
and to any other person desiring it, upon payment of charges to be fixed by the
Commission. If no protests are filed to the application within the time
provided for in Rule R2‑11, or as extended by order of the Commission,
the hearing may be cancelled and the Commission may proceed to decide the
application on the basis of information contained in the application and sworn
affidavits.

(2) Repealed.

(3) Upon receipt of an application to operate
as a bus company over fixed routes, the Commission, within ten (10) days after
the filing of the application, shall cause notice thereof to be given by mail
to the applicant, to other bus companies holding certificates to operate in the
territory proposed to be served by the applicant, and to other bus companies
who have pending applications to so operate. If no protests, raising material
issues of fact to the granting of the application, are filed with the
Commission within thirty (30) days after the notice is given, the Commission
shall proceed to decide the application. If protests are filed raising material
issues of fact to the granting of the application, the Commission shall set the
application for hearing as soon as possible and cause notice thereof to be
given to the applicant and all other parties of record.

(4) The notice shall give the general nature
and scope of the proposed operations and shall also fix the time within which
protests, if any, shall be filed to the application. (See Rule R2‑11.)
See G.S. 62‑300.

(a) Any carrier operating as a common carrier under any
certificate issued by the Commission which proposes to sell, assign, pledge,
lease or transfer any right or interest in such certificate or to change its
name, or trade name, or enter into any merger, combination, or joint control
with any other carrier through purchase of stock or otherwise, shall apply in
writing to the Commission with a copy to the Public Staff and obtain its
written approval. This rule includes the following:

(1) A change of name or trade name which does
not involve any change of ownership or control.

(2) Any change in the membership of a
partnership, or the creation or dissolution of a partnership, which does not
amount to a transfer of the controlling interest in the business to a new
party.

(3) The incorporation of a transportation
business which does not involve any substantial change of ownership or control
of the business.

(4) Any pledge of a certificate for the purpose
of securing a loan in furtherance of the transportation business of the carrier
or any change of control through stock transfer except as provided in example
(7).

(5) A lease of all or any part of the rights
represented by a certificate.

(6) A sale or assignment of rights represented
by a certificate.

(7) Any merger, combination or agreement
through purchases of stock or by any other means by which joint or common
control of two or more carriers is effectuated.

(b) In examples (1) through (4) the Commission will not
give notice to other carriers or conduct formal hearings unless some matter in
the particular application appears to require notice and formal hearing.

(c) In examples (5) through (7) notice shall be given and
hearings held as in applications for certificates.

(a) Unless the applicant elects to accept only the type of
authority set out in the application, the Commission will grant such authority
as the evidence shows the applicant is entitled to receive; that is to say, if
the applicant has misconceived the nature of his proposed operation, or has
misconstrued the meaning of terms used in his application, the Commission will
disregard the form of the application and grant such authority within the scope
of the application as the applicant is entitled to receive upon the facts.

R2‑11 PROTESTS
of applications for certificates of public convenience and necessity

(a) Except for good cause shown, no party shall be heard in
opposition to an application for a certificate unless such party shall have
filed a protest to such application not less than ten (10) days prior to the
date set for the hearing or within the time specified in the notice.

(b) No person shall be heard in opposition to any other
matter set for hearing before the Commission unless such person shall have
filed a protest to such matter not less than ten (10) days before the date set
for the hearing unless otherwise specified by the Commission.

(c) All protests shall be in writing, shall be verified by
the protestant and shall show whether or not the protestant holds authority
from the Commission, the type of service authorized and the particular way in
which the protestant is adversely affected. Parties holding similar authority
may join in one protest signed and verified by one of the parties.

(d) The original and seventeen complete copies of the
protest must be mailed or delivered to the Commission within the time fixed for
filing protests, and it must appear in the verification or in some statement
attached to the protest that a copy thereof has been mailed or delivered to the
applicant and a copy to his attorney, if any, appearing in the notice of
hearing.

R2‑11 PROTESTS
of applications for certificates of public convenience and necessity

(a) Except for good cause shown, no party shall be heard in
opposition to an application for a certificate unless such party shall have
filed a protest to such application not less than ten (10) days prior to the
date set for the hearing or within the time specified in the notice.

(b) No person shall be heard in opposition to any other
matter set for hearing before the Commission unless such person shall have
filed a protest to such matter not less than ten (10) days before the date set
for the hearing unless otherwise specified by the Commission.

(c) All protests shall be in writing, shall be verified by
the protestant and shall show whether or not the protestant holds authority
from the Commission, the type of service authorized and the particular way in
which the protestant is adversely affected. Parties holding similar authority
may join in one protest signed and verified by one of the parties.

(d) The original and seventeen complete copies of the
protest must be mailed or delivered to the Commission within the time fixed for
filing protests, and it must appear in the verification or in some statement
attached to the protest that a copy thereof has been mailed or delivered to the
applicant and a copy to his attorney, if any, appearing in the notice of
hearing.

Upon request in writing and for good cause shown, a carrier
or other person may, in the discretion of the Commission, intervene in support
of or against a pending application, subject to such terms and conditions as
the Commission may prescribe; provided, however, no person shall be permitted
to intervene in opposition to an application who could have with reasonable
diligence filed a protest in compliance with Rule R2‑11.

R2‑13 MOTION FOR CONTINUANCE OF HEARING

No application which has been set for hearing will be
continued or postponed except upon written motion filed with the Commission and
all parties not less than ten (10) days prior to the date of the hearing.

R2‑14 TESTIMONY

(a) Testimony for or against the granting of an application
may be oral, in the form of exhibits, or both. Sufficient copies of all
exhibits shall be made available for the use of the parties and the Commission
and the Public Staff. Exhibits shall contain statements of facts relevant to
the particular application without argument or conclusions.

(b) The Commission will limit the time for direct and cross‑examination
of witnesses when in its judgment such examinations are repetitious and
unnecessarily prolonged. In cases in which protests are substantially the same,
the Commission may, in its discretion, limit the cross‑examination of
witnesses by protestants to one attorney or party. Cumulative testimony or
repetition of facts will be limited to reasonable bounds.

(NCUC Docket No. M‑100, Sub 75, 10/27/77.)

R02-15 PROOF REQUIRED

(a) If the application is for a certificate of exemption to
operate as a common carrier of household goods, the applicant shall establish
by proof that the requirements of Rule R2-8.1(a)(3) are satisfied.

(b) Repealed.

(c) If the application is for a certificate to operate as a
bus company in the transportation of passengers over fixed routes, the
applicant shall establish that it is fit, willing and able to provide the
transportation to be authorized by the certificate and to comply with the
provisions of Chapter 62 of the Public Utilities Act, and that the
transportation to be authorized is consistent with the public interest.

In making any findings relating to public interest under
section (c) of this Rule, the Commission shall consider, to the extent
applicable, (i) the transportation policy of this State as it relates to bus
companies under G.S. 62-259.1 and Chapter 62 of the Public Utilities Act; (ii)
the value of competition to the traveling and shipping public; (iii) the effect
of issuance of the certificate on bus company service and small communities;
and (iv) whether issuance of the certificate would impair the ability of any
other fixed route carrier of passengers to provide a substantial portion of its
fixed route passenger service, except that diversion of revenue or traffic from
a fixed route carrier of passengers, alone, shall not be sufficient to support
a finding that issuance of the certificate would impair the ability of the
carrier to provide a substantial portion of its fixed route passenger service.

(a) A fuel surcharge for household goods carriers shall be
established by the Commission on a monthly basis using the following procedure:

(1) On the last Tuesday of each month (or the
next business day thereafter if delayed by a legal State or Federal holiday),
the Public Staff shall file its recommended fuel surcharge in the current
calendar year fuel surcharge docket (T-825). The recommended fuel charge shall
be calculated by the Public Staff as follows:

a. Using the On-Highway Diesel Fuel Price Index and
Retail Gasoline Price Index for the Lower Atlantic Region released that week by
the United States Department of Energy - Energy Information Administration
(EIA), or another source approved by the Commission, the Public Staff shall
determine a current composite cost of fuel using the diesel/gasoline ratio
shown in Schedule 2-A filed in Docket No. T-825, Sub 334, on March 28, 2000.

b. With this composite cost of fuel, the Public Staff
shall determine the appropriate fuel surcharge using the Fuel Surcharge Index
Chart filed on October 6, 2005, in Docket No. T-825, Sub 339, to be applied per
bill of lading mile for all North Carolina intrastate household goods moves
governed by the Commission’s most recently issued Maximum Rate Tariff in
accordance with the procedures outlined in Docket No. M-100, Sub 121, and the
provisions of Appendix A, Paragraph C, of the Order dated January 18, 1991.

(2) On the first business day of the week
following the Public Staff’s filing, the Commission will issue an order
adjusting the fuel surcharge when an adjustment is appropriate.

(b) All fuel surcharge revenue assessed and collected shall
be passed on or otherwise credited to the purchaser of the fuel. The fuel
surcharge shall be assessed once per shipment regardless of the number of
vehicles used.

(NCUC Docket No. T-100, Sub 93, 6/5/14.)

R2‑16 RATES AND CHARGES

(a) Every common carrier of household goods by motor
vehicle and the motor carriers voluntarily participating in this rule pursuant
to G.S. 62-152.2 shall be subject to and strictly observe the provisions,
rates, and charges of the Maximum Rate Tariff issued by the Commission for the
transportation of household goods in intrastate commerce between all points
within the area authorized to be served. All common carriers of passengers by
motor vehicle shall file with the Commission, publish and keep open for public
inspection and strictly observe all tariffs showing all rates and charges for
the transportation of passengers in intrastate commerce between all points
within the area authorized to be serviced (G.S. 62-138).

(a) Upon taking precautions deemed by them to be sufficient
to assure payment of the tariff charges within the credit period herein
specified, common carriers of household goods by motor vehicle may relinquish
possession of household goods in advance of the payment of the tariff charges
thereon and may extend credit in the amount of such charges to those who
undertake to pay them, such persons herein being called shippers, for a period
of fifteen (15) days. When the bill of lading covering a shipment is presented
to the shipper on or before the date of delivery, the credit period shall run
from the first 12 o'clock midnight following delivery of the household goods.
When the bill of lading is not presented to the shipper on or before the date
of delivery, the credit period shall run from the first 12 o'clock midnight
following the presentation of the bill of lading.

(b) Where a common carrier by motor vehicle has
relinquished possession of household goods and collected the amount of tariff
charges represented in the bill of lading presented by it as the total amount
of such charges, and another bill of lading for additional charges is
thereafter presented to the shipper, the carrier may extend credit in the
amount of such additional charges for a period of thirty (30) calendar days, to
be computed from the first 12 o'clock midnight following the presentation of
the subsequently presented bill of lading.

(c) Bills of lading for all transportation charges shall
be presented to the shippers within seven (7) calendar days from the first 12
o'clock midnight following delivery of freight.

(d) Shippers may elect to have their bills of lading
presented by means of the United States mails, and when the mail service is so
used the time of mailing by the carrier shall be deemed to be the time of
presentation of the bills. In case of dispute as to the time of mailing, the
postmark shall be accepted as showing such time.

(e) The mailing by the shipper of valid checks, drafts, or
money orders, which are satisfactory to the carrier, in payment of freight
charges within the credit period allowed such shipper, may be deemed to be the
collection of the tariff charges within the credit period for the purpose of
these rules. In case of dispute as to the time of mailing, the postmark shall
be accepted as showing such time.

G.S. 62-203 specifically sets forth the carrier's liability
for damaged property in transit. The carrier issuing a bill of lading for
transportation of household goods in intrastate commerce and the motor carriers
voluntarily participating in this rule pursuant to G.S. 62-152.2 shall be
liable to the lawful holder thereof for any loss, damage or injury to such
property caused by it or by any carrier participating in the haul and
transporting it on a through bill of lading, and such carrier delivering said property
so received and transported shall be liable to the lawful holder of said bill
of lading or to any party entitled to recover thereon for such loss, damage or
injury, notwithstanding any contract or agreement to the contrary; that is to
say, that once the validity of a claim is established by the originating and/or
delivering carrier, settlement of said valid claim shall be promptly made to
the claimant. In the case of a claim where more than one carrier participated
in the haul, either the originating or delivering carrier after establishing
the validity of said claim shall make prompt settlement to the party in
interest filing said claim, and the proration of any settlement thereof shall
be a matter between the participating carriers and not between the shipper or
receiver and each of said participating carriers. THIS RULE DOES NOT APPLY TO
MOTOR CARRIERS OF PASSENGERS.

No carrier shall engage in transportation in intrastate
commerce for compensation in North Carolina until and unless such carrier shall
have applied to and obtained from the North Carolina Utilities Commission the
appropriate certificate of exemption to so operate. Any authority granted by
the Federal Motor Carrier Safety Administration does not confer, and does not
purport to confer, upon any carrier the right to engage in intrastate commerce
in North Carolina. Such certificate of exemption may be obtained in the manner
set out in the Public Utilities Act, and in no other way. Interstate carriers
who engage in transportation in intrastate commerce for compensation in North
Carolina without first obtaining a certificate of exemption in the manner
provided in said Act will be subject to the penalties prescribed in G.S. 62‑325
of said Act.

R2‑22 BEGINNING OPERATIONS UNDER A CERTIFICATE
OR CERTIFICATE OF EXEMPTION FOR THE

TRANSPORTATION OF PASSENGERS

(a) An order of the Commission, approving an application,
or the issuance of a certificate does not within itself authorize the carrier
to begin operations. Operations are unlawful until the carrier shall have
complied with the following:

(1) Registration of its rolling equipment with
the Division of Motor Vehicles on Form NCMC 19.

(2) Filing insurance with the Division of Motor
Vehicles covering its rolling equipment or by providing other security for the
protection of the public, as provided by Rule R2‑36.

(3) In the case of common carriers, filing
tariffs to be made for the transportation service authorized, as provided by
Rule R2‑16.

(b) Unless a common carrier complies with the foregoing
requirements and begins operating, as authorized, within a period of thirty
(30) days after the Commission's order approving the application becomes final,
unless the time is extended in writing by the Commission upon written request,
the operating rights therein granted will cease and determine.

All motor carriers will be held to strict account for the
use of their operating rights, and to permit the use of the same by others for
the transportation of persons or household goods for compensation shall be
deemed just cause for the revocation of such rights. This rule positively
forbids the party to whom operating rights have been granted from permitting
others to use the name or operating authority of such party.

(a) No carrier shall operate any motor vehicle upon the
highways in the transportation of household goods or passengers for
compensation unless the name, or trade name, home address and the North
Carolina number assigned to such carrier, as provided in Rule R2-25 appear on
both sides of such vehicle in letters and figures not less than three inches
high.

Example: John Doe Trucking
(Bus) Co.

Greensboro,
N.C.

N.C. No. C-132(B-132)

The North Carolina number assigned to such carrier shall
also be placed on the rear, left upper quadrant, of such vehicle in letters and
figures not less than three inches high. In case of a tractor-trailer unit,
the side markings must be on the tractor and the rear markings must be on the
trailer.

(b) The markings required may be printed on the vehicle, or
on durable placards securely fastened on the vehicle.

(c) Subject to the exceptions noted below, this Rule
applies to every vehicle used by the carrier in his operation whether owned,
rented, leased or otherwise; but in case of rented or leased vehicles the words
"Operated By" shall also appear above or preceding the name of the
carrier, unless such vehicles are under permanent lease, in which case the name
of the lessor and the words "Operated By" need not appear.

(d) This Rule does not apply to carriers engaged only in
interstate commerce. If the carrier is engaged in both interstate and
intrastate commerce and is marked as required by the Federal Motor Carrier
Safety Administration, then in that case, it will only be necessary for the
carrier to print his North Carolina number in a conspicuous place near his name
in letters and figures corresponding in size with Federal Motor Carrier Safety
Administration regulations.

The lessor of operating rights shall supervise the operation
of its lessee to the extent of requiring said lessee, during the term of the
lease, to promptly pay all debts of the nature set out in G.S. 62‑111, and
upon the termination of the lease, whether by agreement between the parties, by
order of the Commission, or otherwise, operations shall not be resumed by the
lessor, or by any transferee of the lessor, until all such debts shall have
been paid.

R2‑30. Repealed by NCUC Docket No. T-100, Sub
32, 8/23/95.

R2‑31. Repealed by NCUC Docket No. T-100, Sub
32, 8/23/95.

R2‑32. Repealed by NCUC Docket No. T-100, Sub
32, 8/23/95.

R2‑33 PRIVATE CARRIAGE BY REGULATED CARRIERS

A common carrier may conduct intrastate regulated and
private carriage on a tandem or commingled basis provided that separate
accounting records of regulated and proprietary transportation operations are
maintained.

When any common carrier has been authorized by this
Commission to transport household goods, such carrier is thereafter obligated
to transport said household goods as authorized. Refusal of transportation
offered or any discrimination or undue preference in the movement thereof is
prohibited.

Any franchise may be suspended, in whole or in part, at the
discretion of the Commission, upon application of the holder thereof. The
application for authorized suspension may be in the form of a letter or formal
motion and shall include the carrier's name, address, certificate number, the
reason for the request for authorized suspension, and the length of time for
which the authorized suspension is requested, up to one year per request.
During an authorized suspension of operations, a carrier shall continue to file
with the Commission an annual report and quarterly public utility regulatory
fee reports and pay the applica­ble regulatory fees. If a carrier desires to
commence operations while under an authorized suspension of operations, the
carrier shall inform the Commission in writing and shall also comply with the
filing requirements in Rule R2-22 prior to commencing operations.

(NCUC Docket No. T-100, Sub 29, 2/3/95.)

R2‑35 Interchange by motor freight carriers of
intrastate traffic

Repealed by NCUC Docket No. T-100, Sub 49, 01/09/04.

R2‑36 Security
for the protection of the public.

(a) All common motor carriers, including exempt for‑hire
passenger carriers, shall obtain and keep in force and maintain on file at all
times with the Division of Motor Vehicles public liability and property damage
insurance issued by a company authorized to do business in North Carolina in
amounts not less than the following:

Limit for bodily injuries to or death of all persons
injured or killed in any one accident (Subject to a maximum of $100,000 for
bodily injuries to or death of one person)

Limit for loss or damage in any one accident to property
of others (excluding cargo)

Freight Equipment:

All motor vehicles used in the transportation of household
goods with a GVW of 26,000 lbs or less.

$100,000

$300,000

$50,000

All motor vehicles used in the transportation of household
goods with a GVW of 26,001lbs. or more shall maintain coverage in the amount
of $750,000 for public liability and property damage as required by federal
law.

Passenger Equipment:

The minimum levels of financial responsibility are as
prescribed for motor carriers of passengers pursuant to the provisions of 49
U.S.C. 10927(a)(1), which are $5,000,000 for vehicles with a seating capacity
of 16 passengers or more and $1,500,000 for vehicles with a seating capacity
of 15 passengers or less. Provided, however, that a passenger carrier
providing transportation of passengers exclusively for or under the control
of a local Board of Education operating under the authority of the State, or
the State Department of Education, or the United States Department of
Defense, to the extent that said arm of the United States Government
maintains local boards of education in the State of North Carolina, shall
obtain and keep in force at all times public liability and property damage
insurance in the minimum amounts provided for in 49 U.S.C. 10927(a)(1) or in
a minimum amount not less than said limits as may be specified and approved
by the local Board of Education or State Department of Education, or the
United States Department of Defense contracting with said passenger carrier,
provided, however, that in no event shall the minimum level of financial
responsibility be less than $1,000,000.00. Provided, further, that no bus
company operating solely within the State of North Carolina and which is
exempt from regulation under the provisions of G.S. 62‑260(a)(7) shall
be required to file with the Commission proof of the financial responsibility
in excess of one million five hundred thousand dollars ($1,500,000).

(b) The policy shall have attached thereto endorsement Form
F and as evidence of such insurance there shall be filed with the Division of
Motor Vehicles certificate of insurance Form E.

(c) In addition to the foregoing insurance, all common
carriers of household goods and the motor carriers voluntarily participating in
this rule pursuant to G.S. 62‑152.2 shall maintain the following cargo
and general liability insurance coverage to compensate shippers or consignees
for loss of or damage to household goods belonging to shippers or consignees
and coming into the possession of motor common carriers in connection with
their transportation service, in not less than the following amounts: (1) Cargo
insurance: for loss of or damage to household goods carried on any one motor
vehicle ‑ $35,000; and for loss of or damage to or aggregate of losses or
damages of or to household goods occurring at one at any one time and place -
$50,000. The policy shall have attached thereof endorsement Form I or a
facsimile thereof and as evidence of such insurance there shall be filed with
the Division of Motor Vehicles certificate of insurance Form H or a facsimile
thereof. (2) General liability insurance: for loss of or damage to property of
shipper or consignee in the amount of $50,000. A certificate of insurance
proving such coverage shall be provided to the Commission (a) prior to being
issued a certificate of exemption and (b) with the filing of each annual
report.

(d) No insurance policy, endorsement, rider or certificate
of insurance issued by any insurance company, covering the liability of any
motor carrier authorized to operate in North Carolina under a certificate
issued by the North Carolina Utilities Commission will be accepted by the
Division of Motor Vehicles for filing, unless the same is signed by an officer
of the insurance company or by a North Carolina resident agent of the insurance
company duly licensed by the Insurance Commissioner of the State of North
Carolina.

(e) To the end that the Commission or Division of Motor
Vehicles may be advised of the risks and liabilities assumed by such motor
carriers under such insurance policies, no deductible agreement between insurer
and insured shall be deemed valid and enforceable against the insured unless a
true and correct copy of such agreement, countersigned as required in
subsection (d) hereof, shall have been first filed with and approved by the
Commission.

(f) A common carrier or exempt for-hire passenger carrier
may qualify as self-insurer, or be permitted to post bond in lieu of insurance
upon application to and written approval by the Commission, but no such
application will be approved unless it shall appear to the satisfaction of the
Commission that the applicant is in such financial condition as to be able to
pay personal injury and property damage claims arising out of motor vehicle
accidents from its own assets without seriously affecting its financial
stability and the continuation of its operations. The Division of Motor
Vehicles will accept only surety companies, authorized to do business in North Carolina, as surety on bonds referred to in this rule.

(g) In all cases under this rule, actual filing must be
made with the Division of Motor Vehicles before operations begin. Household
goods carriers must also provide the certificate of insurance providing proof
of general liability coverage in the amount of $50,000 before operations
begin. Letters or telegrams to the effect that insurance is in force will not
be accepted in lieu of actual filing.

Group 18. Household Goods. — The term
"household goods'', as used in connection with transportation, means
personal effects and property used or to be used in a dwelling, when a part of
the equipment or supply of such dwelling, and similar property if the
transportation of such effects or property is arranged and paid for by the
householder or another party.

(a) Every common carrier of household goods by motor vehicle
and the motor carriers voluntarily participating in this rule pursuant to G.S.
62-152.2 receiving property for transportation shall issue a uniform bill of
lading therefore, the form, terms, and conditions to be set out in the Maximum
Rate Tariff issued by the Commission.

(b) A complete copy of every such bill of lading, or a full
and complete record thereof made at the time the same is issued, shall be kept
by the carrier in numerical or chronological order separate from other records
for a period of three (3) years, and the same shall be available for inspection
by the Commission or its agents.

(a) Auditors, accountants, inspectors, examiners of the
Public Staff or Commission Staff or their agents, upon demand and display of
proper credentials, shall be permitted by any carrier transporting, or
authorized to transport, household goods or passengers over the public highways
of North Carolina for compensation to examine the books, records, accounts,
bills of lading, or other records of such carrier relating to the
transportation of household goods or passengers and the terminals, building,
and other facilities used by such carrier in such transportation business; and
all such carriers shall instruct their drivers, agents and employees in charge
of such records and facilities to permit such examination.

(b) Repealed.

(c) No inspector or other agent of the Commission or the
Public Staff shall knowingly and wilfully divulge any fact or information which
may come to his knowledge during the course of any such examination or
inspection, except to the Commission or as may be directed by the Commission or
upon approval of request to the Commission by the Public Staff or by a court or
judge thereof. See G.S. 62-316. (NUCU Docket No. M-100, Sub 14, 10/5/67; NCUC
Docket No. M-100, Sub 75, 10/27/77; NCUC Docket No. M-100, Sub 109, 5/20/86;
NCUC Docket No. T-100, Sub 32, 8/23/95; NCUC Docket No. T-100, Sub 49,
01/09/04.)

R2‑43 SERVICE OF PAPERS

Any citation, summons, subpoena, order or process issued by
the Commission in any proceeding may be served:

(1) By any peace officer authorized to serve
process.

(2) By any person designated by the Commission
to serve the same.

(3) By certified or registered mail.

Reference: G.S. 62‑62 and G.S. 62‑63.

R2-44 Process agent

(a) All motor carriers operating under certificates of
public convenience and necessity, or having pending applications to so operate,
shall file with the Division of Motor Vehicles a designation in writing of the
name and post-office address of a person residing in the State of North
Carolina upon whom notice of applications, hearings and orders in proceedings
under said Act may be made.

(b) In proceedings before the Commission involving the
lawfulness of rates, charges, or practices, service of notice upon the person
or agent who has filed a tariff in behalf of such carrier shall be deemed to be
due and sufficient service upon the carrier.

The fees and charges of the North Carolina Utilities
Commission for motor carriers are set forth in G.S. 62‑300.

R2‑46. Repealed by NCUC Docket No. M‑100,
Sub 109, 5/20/86.

R2‑47 DISCONTINUANCE OF SERVICE

(a) No common carrier shall abandon or discontinue any
service authorized by its certificate without first obtaining written authority
from the Commission. The petition for such authority shall be filed with the
Commission at least thirty (30) days prior to any discontinuance, unless
otherwise authorized by the Commission, and if petitioner is a motor carrier of
passengers, shall show in support thereof the information set forth in
paragraph (c) herein. The discontinuance or nonuse of a service authorized by a
certificate for a period of thirty (30) days or longer without the written
consent of the Commission shall be considered good cause for cancellation,
seasonal service excepted. Upon receipt of a petition for authority to
discontinue or abandon service, the Commission may designate a time and place
for hearing on the petition. If a petitioning bus company proposes to
discontinue service over any intrastate route or proposes to reduce its level
of service to any points on a route to a level of service which is less than
one trip per day, excluding Saturdays and Sundays, the Commission shall, within
ten (10) days after the filing of the petition, require notice to be given to
the public by posting notice of the petition in buses serving such routes and
in bus stations or other prominent places along said routes. If no objections
are filed to the petition by any person or the Public Staff within thirty (30)
days after notice is given, the Commission may proceed to decide the petition
based on the record and without a hearing.

(b) All interruptions of passenger service, where likely to
continue for more than twenty‑four hours, shall be reported promptly to
the Commission and to the public along the route, with full statement of the
cause and its possible duration.

(c) In support of any petition or schedule which proposes to
reduce motor passenger carrier service over any North Carolina route or to any
North Carolina point to a level which is less than one (1) trip per five (5)
days per week excluding Saturdays and Sundays, the proponent carrier shall
furnish the data set forth hereinbelow:

(1) A listing of the origin, termination and
all intermediate points which will lose the proponent carrier's service.

(2) A statement as to whether the proponent
carrier is the last or only intercity motor carrier of passengers to or from
the issue points or over the issue route.

(3) A statement identifying any reasonable
alternative to the proponent carrier's passenger and express services on the
issue route and to or from the issue points, which statement shall identify the
location of the alternative services relative to the issue route and points.

(4) For the latest twelve months available to
the proponent carrier, a statement showing:

a. total system bus miles operated;

b. total N.C. bus miles operated;

c. scheduled system bus miles operated; and

d. scheduled N.C. bus miles operated.

(5) A statement or exhibits calculating and
showing:

a. estimated or actual passenger revenues, at
actual and present annualized levels, attributable to that portion of the
proponent carrier's operations proposed to be abandoned, but not including
passenger revenues which the carrier expects to retain in connection with other
services which it will still operate;

b. estimated or actual express revenues, at
actual and present annualized levels, attributable to that portion of the
proponent carrier's operations proposed to be abandoned, but not including
express revenues which the carrier expects to retain in connection with other
services which it will still operate;

c. actual or scheduled N.C. bus miles, for the
latest twelve (12) months available, operated in service over that portion of
the route proposed to be discontinued; and

d. estimated or actual number of interstate
and intrastate passengers transported over the issue route or to or from the
issue points during the latest twelve (12) months available.

The statements
or exhibits containing the calculations and information required under Items A,
B, C and D above shall be presented in such a manner and in such detail that
the Commission can verify the sampling and apportionment methodologies used and
can determine the treatment by the proponent carrier of revenues originating
outside the issue route but within the carrier's system going to any issue
point; revenues originating at an issue point going to points within the
carrier's system but outside the issue route; and revenues originating and
terminating along the issue route. The proponent carrier also shall, at a site
in North Carolina designated by it, make available for inspection by all
parties, and upon order of the Commission shall file, copies of ticket samples,
driver reports, station reports, bus bills, schedule information reports, trend
sheets or any other source documents which show or were used to develop
revenues or passenger counts (whether by schedule, points or route) as
determined in Items A through D above.

(6) The proponent carrier shall calculate and
furnish its system variable costs and the fully allocated costs attributable to
service along and to the issue route and points, with an explanation of how the
costs were calculated, and of any assumptions underlying the calculations,
which assumptions must be consistent with any used to calculate revenues. The proponent
carrier shall furnish such information pursuant to forms and in the format as
from time to time shall be approved by the Commission, if any, but nothing
herein shall preclude the carrier from submitting, in addition to the above,
the same data in a different form or format if it so desires.

R2-48.1 Practices of household goods carriers relating to
released values

(a) Motor carriers of household goods in intrastate commerce
in North Carolina shall use the uniform bill of lading in connection with all
shipments handled by them.

(b) Motor carriers of household goods shall not charge rates
and charges in excess of those as provided in the Maximum Rate Tariff issued by
the Commission.

(c) Motor carriers of household goods shall not engage in or
be a party to the sale of insurance coverage for any shipment for the purpose
of keeping declared value at a figure less than the declared value stated by
the shipper, nor shall such carriers at any time apply a base rate applicable
to a declared value when the declared value is in excess of the base rate
value, nor shall they include on the bill of lading or any other bill for
transportation services any costs incident to insurance coverage.

(a) Household goods carriers in intrastate commerce shall
not use any name in the advertising, soliciting, or handling of intrastate
business other than the name or trade name in which their operating authority
is issued from the Utilities Commission.

(b) In the event that any household goods carriers in
intrastate commerce uses joint advertising with any national carrier with which
it has any connection, such advertising must state clearly that the intrastate
hauling is performed solely by the North Carolina carrier and has no connection
with the interstate carrier named in the advertisement.

(c) Household goods carriers operating in North Carolina
intrastate commerce shall clearly display their certificate of exemption
numbers in any paid print or other visual form of advertising.

(a) The Uniform Systems of Accounts adopted by the
Interstate Commerce Commission are hereby prescribed for use of Class I, Class
II, and Class III Common Carriers of Passengers, who operate under the
jurisdiction of this Commission pursuant to the Public Utilities Act or through
the Commission's authority to fix rates and charges. (G.S. 62-260, subsection
(b)).

For purposes of annual, other periodical and special reports
commencing with the year beginning January
1, 1980, and thereafter until further ordered, common carriers of passengers
subject to the North Carolina Utilities Commission's jurisdiction will assume
their classification according to the most current dollar amounts in effect and
prescribed by the Interstate Commerce Commission. Classifications in effect as
of January 1, 1980, are as follows:

CLASS
II: Carriers having annual carrier operating revenues (including interstate and
intrastate) of $500,000 but less than $3 million.

CLASS
III: Carriers having annual carrier operating revenues (including interstate
and intrastate) of less than $500,000.

The class to which any carrier belongs shall be determined
by annual carrier operating revenue by the following manner and procedure:

(1) If at the end of any calendar year or of 13
four‑week periods, such annual carrier operating revenue is greater than
the maximum for the class in which the carrier is classified, the carrier shall
adopt the accounting and reporting requirements of the higher class in which it
falls. For Class III carriers, adoption of Class II classification shall be
effective as of January 1 of the following year. For Class II carriers,
adoption of a higher classification shall be effective as of January 1 of the
second succeeding year after the carrier meets the minimum revenue limit for
Class I.

(2) If at the end of a calendar year, or
accounting year of 13 four‑week periods, a carrier's annual operating
revenue is less than the minimum of the class in which the carrier is
classified, and has been for three consecutive years, the carrier shall adopt
the accounting and reporting requirements of the lower class in which the
current year revenue falls. Adoption of the lower class shall be effective as
of January 1 of the following year.

(3) Carriers shall notify the Commission by
letter of any change in classification by October 31 of each year.

(4) Any carrier which begins new operations
(obtains operating authority not previously held) or extends its existing
authority (obtains additional operating rights) shall be classified in
accordance with a reasonable estimate of its annual gross carrier operating
revenues.

(5) When a business combination occurs, such as
a merger, reorganization, or consolidation, the surviving carrier shall be
reclassified effective January 1 of the next calendar year on the basis of the
combined revenue for the year when the combination occurred.

(6) In unusual circumstances, such as partial
liquidation and curtailment or elimination of contracted services, where the
classification regulations will unduly burden the carrier, the carrier may
request the Commission for an exception to the regulations. This request shall
be in writing specifying conditions justifying an exception.

(a) The following Orders adopted by the Federal Motor
Carrier Safety Administration for control of motor transportation during the
national emergency are hereby adopted for application to intrastate commerce
within the State of North Carolina:

GENERAL ORDER ICC TM‑1 -
Preference and Priority for the Transportation by Carriers for Hire of United
States Military Personnel, Accredited Civil Defense Workers and United States
Mail.

GENERAL ORDER ICC TM‑5 -
Disposal by Carriers of Undeliverable Shipments.

GENERAL ORDER ICC TM‑6 -
Control of Railroad Tank Cars.

GENERAL ORDER ICC TM‑7 -
Rerouting of Rail Traffic.

GENERAL ORDER ICC TM‑8 -
Direction to Certain Over‑The‑Road Motor Carriers of Property
Regarding Routes, Diversions and Service to Certain Destinations.

GENERAL ORDER ICC TM‑9 -
Direction to Certain Intercity Common Carriers of Persons by Bus to Serve
Certain Points.

GENERAL ORDER ICC TM‑10 -
Control of Motor Transport Vehicles.

GENERAL ORDER ICC TM‑11 -
Control of Freight Shipments to or within Port or Storage Areas.

GENERAL ORDER ICC TM‑12 -
Inventory and Disposition of Shipments of Food and Medical Supplies
Requisitioned by Government in Possession of Railroads and Motor Carriers.

PROCEDURAL ORDER ICC TM‑11‑PO-1
- Procedures and Delegations of Authority under General Order ICC TM‑11
for Rail Shipments.

GENERAL ORDER ICC TM‑13 -
Control of Liquid Transport Vessels.

(b) The above Orders of the Federal Motor Carrier Safety
Administration shall become effective as to intrastate commerce within North
Carolina only upon the proclamation of the existence of a state of civil
defense emergency by the President or by concurrent resolution of the Congress.

(a) No carrier holding a franchise certificate has the
right to issue an embargo on intrastate traffic against any carrier or any
goods except upon application to, and approval by, the North Carolina Utilities
Commission.

(b) A franchise certificate grants certain rights and the
rights so granted therein presuppose a service to be rendered, and any embargo
establishes a condition which the carrier does not have the right to impose;
therefore, where the carrier desires to embargo any shipments, application must
be made to the Commission for approval, and then the Commission will pass upon
the necessity therefor.

(c) The procedure to be followed in connection with an
embargo will be for the carrier desiring to establish same to notify the
Commission in a letter with a copy to the Public Staff, sending a copy of said
letter to any and all carriers affected, after which the carriers receiving
such notice shall have three days within which to advise the proponent and the
Commission of their attitude thereon, after which the Commission will notify
all parties to the proceeding if it desires to hold a public hearing thereon.

(a) Adequate bus station facilities commensurate with the
requirements of the traveling public must be provided by all motor carriers of
passengers subject to the jurisdiction of the Commission in cities or towns in
which service is rendered.

(b) All bus passenger waiting rooms shall be supplied with
good, pure drinking water easily accessible to passengers; and shall be so
lighted, heated, ventilated and equipped as to render occupants of the same
reasonably comfortable, the circumstances of each case being considered.

(c) In all cities where the service requires full time
employees, or exclusive station buildings, or exclusive space in buildings
constructed primarily for other purposes, adequate accommodations shall be
provided, including comfort stations and rest rooms with running water.

(d) In all towns and cities where agents are employed on
commission and the station is located in a place with another business,
adequate accommodations shall be provided, insofar as it is practicable to do
so, the circumstances in each instance to be taken into consideration.

(e) In providing bus station facilities, the gross receipts
from ticket sales shall be considered as a factor, but not necessarily the
controlling factor in determining the cost of construction, operation and
maintenance of the station.

(f) All bus station waiting rooms shall be equipped with a
fire extinguisher, bearing the label of approval of the Fire Underwriters'
Association, which shall be filled and kept in good serviceable condition, and
shall be so placed as to be plainly visible and readily accessible and easily
removable from the holders; provided, however, this requirement shall not apply
to those ticket agencies where some other endeavor is the principal business or
one of the principal businesses and the selling of bus tickets is incidental to
such principal business or businesses.

R2‑55. Repealed by NCUC Docket No. M‑100,
Sub 109, 5/20/86.

R2‑56 TICKETS

(a) Carriers to Provide Tickets. - All passenger carriers
shall provide tickets at all agency stations and at such other places indicated
on the published time schedules where satisfactory financial arrangements for
handling can be made.

(b) Tickets to Be Accepted by Connecting and
Interconnecting Carriers. - All passenger carriers shall join in publishing an
interline tariff and furnish such tariff to all agents on all carriers' lines
and all tickets when sold by one carrier over another line or lines shall be
accepted by the other carrier, or carriers, at the value of the ticket set
forth in the interline tariff, less the percentage charge for selling
commission, and the accepting carrier shall render statements to originating
carrier, or seller, at regular intervals of not less than thirty (30) days.

(c) Carriers Operating Between Common Points. - Passenger
carriers operating from a common station where tickets are sold to a common
destination, over the same or different routes, shall honor the tickets of one
another between said points, and the carrier lifting the same shall be
reimbursed therefor by the issuing carrier in the amount paid for same, less
the applicable station charge at point of sale.

(d) Passenger to Determine Ticket Destination. - At the
time of the sale of an interline ticket the passenger shall determine the
destination and routing called for on the ticket, provided such destination be
on a known carrier's line and recorded in the joint or interline tariff and such
interline ticket shall not be reissued en route except at the passenger's
request. The passenger shall be given the advantage of a reduction of fare, if
any, because of the change in routing and the reissuing carrier shall make the
adjustment and note same on the original ticket for the information of the
original seller who shall reimburse the reissuing carrier upon the receipt of
the statement in which the original ticket, or a portion of the original
ticket, is rendered.

(e) "Closed Ticket''. - No carrier or ticket agent
shall issue so‑called "closed tickets," or by any rule,
practice, or device deter or prevent passengers from having their tickets
reissued and rerouted at any interchange agency station upon the request of
passengers.

(f) Reissue of Ticket to Permit Passenger to Reach
Destination. - When passenger cannot board issuing carrier's bus out of
station, ticket may be reissued so as to permit passenger to reach destination
over most convenient route but the return ticket must not be taken up and
reissued at this time.

(g) Reissue of Ticket to Returning Passenger. - When
returning passenger cannot take issuing carrier's bus out of the station,
ticket should be reissued for passenger to go to original issuing carrier's
nearest station on passenger's most direct return route and then over original
issuing carrier's route, unless passenger requests another routing.

(h) Sale of Tickets in Municipality Not on Carrier's Line.
- No carrier shall sell, nor cause or permit its agent to sell, tickets in any
town or city not on its line.

(i) Redemption of Tickets. - All tickets when sold shall
have the date of sale stamped thereon. Tickets when sold shall be redeemable
for transportation within the limits of the tariff when presented to driver on
a bus or shall be redeemable at their sale price in money by the selling agent
on duty at the station where the ticket was purchased on the date of sale or by
the company within twelve months of the date of sale stamped thereon; if no
date is stamped thereon at time of sale, such tickets shall be redeemable upon
presentation at any time; provided, that where tickets have been sold and
baggage checked for transportation the carrier may deduct, at time of
redemption, the usual amount to reimburse it for baggage transfer.

(j) Disposition of Redeemed Tickets. - Tickets redeemed at
a station as provided for under subsection (i) shall not be resold and must be
sent in to the home office of the company whose ticket was refunded for
redemption.

R2‑57 PETITIONS FOR THE ESTABLISHMENT OF
INTERLINE TICKET ARRANGEMENT

In any case where two or more passenger common carriers
cannot agree among themselves upon the establishment of interline ticket
arrangements, the Commission will, upon proper petition being filed with it
with a copy of the Public Staff by an interested carrier or the public, enter
into an investigation, and if justified, prescribe interline ticket
arrangements for use between such carriers. In considering any such petition,
the Commission, among other things, will take into consideration the fact of
whether all carriers involved have in effect a system of accounting which will
permit the easy checking accounting for all revenue and expenditures in
connection with such interline ticket arrangement, and further provided, that
satisfactory financial responsibility is shown by all carriers involved.

(NCUC Docket No. M‑100, Sub 75, 10/27/77.)

R2‑58 INTERCHANGE OF EQUIPMENT

Common carriers of passengers may interchange equipment for
the purpose of providing through service without change of passengers from one
bus to another, but no such interchange agreement shall become effective unless
the parties thereto shall file a true copy thereof with the Commission with a
copy to the Public Staff and give notice thereof to all common carriers
operating to, from or through the interchange point at least twenty (20) days
prior to the effective date of such agreement; provided, the Commission may
upon its own motion, or upon protest, suspend or disapprove the agreement for
reasons considered to be in the public interest.

(NCUC Docket No. M‑100, Sub 75, 10/27/77.)

R2‑59 TIME TABLES

(a) Information in Table. - Every common carrier of
passengers shall file with the Commission with a copy to the Public Staff a
time table showing the time of arrival and departure of its coaches at each
regular station or stop, and such time table shall further show the number of
trips to be made daily over each route or routes. Time tables shall be
available in each waiting room at bus stations. Time tables shall bear an
issuing date and an effective date.

(b) Time Table Changes. - Any change in or addition to a
time table shall be made by reissuing the time table. Each new time table shall
cancel the previous time table. Every time table shall bear a number which
shall be placed in the upper left‑hand corner of the title page and shall
be printed in bold type. Time tables shall be numbered consecutively. Five (5)
copies of all changes in time schedules shall be filed with the Commission not
less than twenty (20) days prior to the effective date of change, together with
a certificate that copies thereof have been furnished by first class mail to
all connecting carriers and that said changes have been posted in bus stations
and at bus stops: Provided, however, that the Commission may order such changes
to be made upon shorter notice.

(c) Protest. - Where changes in time schedules, other than
changes relating to scheduling of interstate or intrastate transportation
provided by a motor common carrier of passengers subject to the jurisdiction of
the Interstate Commerce Commission under subchapter II of chapter 105 of Title
49 of the United States Code on an authorized interstate route, are properly
posted in accordance with subsection (b) above and no protest is received by
the Commission during the first fifteen (15) days after notice is properly
posted, the carrier, unless otherwise directed by the Commission, will be
allowed to make the change effective on date shown on the schedule, subject to
complaint and further order of the Commission. No protest by a connecting or
competing carrier to a change of schedule will be considered unless it is filed
with the Commission in writing, gives the reasons for such protest and
certifies that a copy thereof has been mailed by certified or registered mail
to the carrier proposing the change.

(d) Adherence to Schedules. - Time schedules as filed with
and approved by the Commission and posted for the information of the public
shall be strictly complied with. Habitual or intentional delay to obtain
passengers of a competitor will be considered just cause for removing the
schedule of the offending carrier.

(e) Effective Date. - This amended rule shall be effective
on and after July 1, 1986.

(a) Baggage, not exceeding a total weight of one hundred
fifty (150) pounds shall be checked and carried free of charge on each adult
ticket. Baggage not exceeding a total weight of seventy‑five (75) pounds
shall be checked and carried free of charge on each half‑fare ticket. No
allowance shall be permitted on tickets purchased for the sole purpose of
avoiding payment of excess baggage.

(b) Subject to the provisions of subsection (a) of this
rule, the transportation of baggage and other articles that may be transported
in baggage service shall be governed by the uniform rules and regulations of
the "National Bus Traffic Association, Inc., Agent", tariff, and
supplements thereto or revision thereof, as filed with the Commission.

(c) In all cases baggage of passengers is to receive
priority over express packages, and shall be transported on the bus carrying
the owner of said baggage when practicable.

R2‑61 TRANSPORTATION OF PROPERTY IN BUSES

The transportation of property by passenger carriers, as
authorized by subsection (g) of G.S. 62‑262.1, shall be so limited as not
to interfere with the comfort and convenience of passengers.

(a) No common carrier of passengers by bus shall accept any
passenger for transportation whose destination is more than fifteen (15) miles
without either providing such passenger with a seat before departure, or
advising such passenger that all seats are occupied, and further advising such
passenger when the next bus is scheduled to depart and arrive at the
passenger's destination, the next schedule meaning the next scheduled of any
carrier.

(b) Failure of a carrier to provide seats for its
passengers shall be considered as evidence that the said carrier is unable or
unwilling to provide buses sufficient to meet public demands and needs.

(c) Subject to the other provisions of this rule and to
other rules and regulations promulgated by the Commission, the carriers
themselves have full control and discretion as to the seating of passengers and
the right to change such seats at any time during the trip shall be reserved by
the carriers.

R2‑63 SANITARY COACHES

It shall be the duty of every motor carrier of passengers
subject to the jurisdiction of the Commission to cleanse thoroughly all
passenger‑carrying vehicles in regular use at least once every twenty‑four
hours, and to keep the same in a clean and sanitary condition while in
operation.

R2‑64 HEATING SYSTEM

All passenger‑carrying vehicles shall be equipped with
a suitable heating system sufficient to keep the same reasonably comfortable
for its passengers and shall be kept in such repair that fumes therefrom shall
not escape into the passenger compartment.

R2‑65. Repealed by NCUC Docket No. M‑100,
Sub 109, 5/20/86.

R2‑66 BROKERS

(a) License Required. - No person, firm or association
shall engage in the business of broker in arranging for the transportation of
passengers and their baggage by motor vehicle in intrastate commerce in North
Carolina without a license therefor issued by the Commission upon application
to the Commission, with a copy of the application also being furnished to the
Public Staff, and after a hearing, or after notice and no protests being filed
as provided by G.S. 62‑263.

(b) Evidence. - No such license shall be issued unless it
shall appear from the testimony offered at the hearing:

(1) That the applicant is not a bona fide
employee or agent of any motor carrier.

(2) That the applicant proposes to engage only
those motor carriers authorized by the Commission to transport passengers as
common carriers by motor vehicle in intrastate commerce in North Carolina.

(3) That the proposed service is desired and
will be used by the public.

(4) That the applicant is fit, willing and able
to properly perform the proposed service.

(c) Bond. - No person shall engage in the business of a
broker as defined in the Public Utilities Act unless and until such person
shall have furnished a bond approved by the Commission in the amount of not
less than $5,000, and in such form as will insure the financial responsibility
of such broker and the supplying of authorized transportation in accordance
with agreements, contracts, and arrangements therefor.

(d) Vehicles and Drivers. - The vehicles and drivers used in
performing the transportation service shall be under the exclusive control of
the motor carrier engaged to perform the transportation service, and the
operation of such vehicles shall be limited to the authority set out in such
carrier's certificate.

(e) Rates and Charges. - The transportation charges shall
be in all respects as prescribed in the carrier's published tariff. Commissions
or other compensation for sale of tickets by brokers shall not be allowed.

(NCUC Docket No. M‑100, Sub 75, 10/27/77.)

R2‑67. Repealed by NCUC Docket No. M‑100,
Sub 109, 5/20/86.

R2‑68. Repealed by NCUC Docket No. M‑100,
Sub 109, 5/20/86.

R2‑69 INTRACITY BUS CARRIERS

(a) Towns and Municipalities. - Unless and until determined
by the Commission in particular cases, all towns and municipalities shall for
the purpose of the administration of G.S. 62‑260 include a zone adjacent
thereto as follows:

(1) A zone within 1/4 mile of the corporate
limits if the municipality has a population of 2,500 or less.

(2) A zone within 1/2 mile of the corporate
limits if the municipality has a population of between 2,500 and 10,000.

(3) A zone within 1 mile of the corporate
limits if the municipality has a population of between 10,000 and 100,000.

(4) A zone within 2 miles of the corporate
limits if the municipality has a population of more than 100,000.

(5) Municipalities whose commercial zones join
shall be considered as one municipality for the purpose of this rule.

(6) The population of any municipality, for the
purpose of this rule, shall be determined by the population shown by the latest
United States Census.

(7) The distances referred to shall be air‑line
distances.

(b) Routing Buses over Streets. - Carriers operating from
outside zones described in subsection (a) into or through cities and towns
shall operate over such streets as local municipal authorities may designate,
subject to the approval of the Commission, and in case of a controversy between
any such carrier and a municipality with respect to routing buses over the
streets of such municipality, or to and from bus stations located therein, the
procedure set out in subsections (c) and (d) of this rule shall be followed in
bringing such controversy before the Commission.

(c) Rates and Controversies Determined by Commission. - As
authorized by G.S. 62‑260, the Commission will fix rates and hear and determine
controversies with respect to extensions and services when brought before it
upon a duly verified petition of a town, municipality, or carrier, from which
it appears that a demand in writing has been made by the petitioner upon the
adverse party for specific relief to be effected by extensions of services, or
by specific change in existing services, and that the relief demanded has been
denied or ignored. No particular form of petition is required, but the relief
demanded and denied or ignored must be clearly and definitely stated. General
complaints or broad‑side allegations which do not present the particular
matter or matters in controversy are not sufficient.

(d) Petition to Be Filed in Quintuplicate. - The petition
must be filed with the Commission in quintuplicate (original and four copies.)

R2‑70 APPLICATION OF RULES

(a) Rules R2‑54 through R2‑60 shall not apply
to common carriers whose operations are found by the Commission to be of such a
local nature as not to require compliance with said rules.

(b) All facilities, services and accommodations provided by
these rules for intrastate passengers at bus stations and on buses shall apply
in like manner to interstate passengers of carriers authorized to operate in
both intrastate and interstate commerce in North Carolina.

(c) The Commission may permit relief from these rules in
special cases in which it finds compliance therewith unjust, impracticable,
contrary to law, or inconsistent with the public interest.

(a) Applicability of Rule. - Subject to all other rules and
regulations of the Commission, this rule is hereby found to be just and
reasonable and adopted and made applicable so far as pertinent to the
operations within the State of North Carolina under authority of certificates
issued by the Commission to all motor carriers of passengers.

(b) Definitions. - As used in this rule, the following
words and terms shall be construed to have meanings as follows:

(1) Designated Highway. - A highway identified for
record purposes by a number, letter, or name such as a turnpike, thruway,
expressway, freeway, or as an "unnumbered county or state road," or
in some other like manner.

(2) Redesignated Highway. - A highway to which
there has been assigned a new designation, either number, letter, name or other
identifying reference, in lieu of a designation previously assigned thereto.

(3) Relocated Highway. - A highway which has
been constructed in a new location in lieu of an existing highway or a segment
or segments thereof, and which is intended to replace such existing highway or
a segment or segments thereof for public use.

(4) Regular Service Route. - A designated
highway or series of highways over which a regular route motor carrier is
specifically authorized to operate with provision in the carrier's certificate
for service at terminal, intermediate, or off‑route points as specified
therein, as distinguished from an alternate route as defined in subdivision (5)
of this subsection. Such regular service route may be described as a single
route in a carrier's authority or as two or more routes which are combined by
joinder at a common service point or points.

(5) Alternate Route. - A designated highway or
series of highways lying wholly within the State of North Carolina over which a
regular route motor carrier may operate in the interest of economy or
convenience or to avoid congested areas, dangerous grades, sharp curves, or
other hazards on an authorized regular service route, deviating from a point on
such authorized regular service route and returning at some other point on the
same regular service route.

(6) By‑Pass Route. - A route designated
by proper authority for the general purpose of avoiding traffic congestion in a
heavily populated area or areas.

(7) Detour Route. - The highway or highways
designated by proper authority for public use while the highway or highways
normally used between specified points is, or are, temporarily closed or
restricted, as by reduced weight limits, or for repairs or constructions, or
for any other reason.

(8) Deviation Route. - Any of the routes used
by a motor carrier under authority of this rule.

(9) Point of Deviation. - The point where a
motor carrier using, or proposing to use, an alternate route, as defined in
subdivision (5) of this subsection or any other deviation route, under
authority of this rule, departs from, or proposes to depart from, its
specifically authorized regular service route.

(10) Point of Return. - The point where a carrier
using, or proposing to use, an alternate route, as defined in subdivision (5)
of this subsection or any other deviation route, under authority of this rule
returns to, or proposes to return to, its specifically authorized regular
service route.

(11) Deadheading Empty Vehicles. - The movement
of empty vehicles incidental to either prior or subsequent transportation in
intrastate commerce.

(c) Authority for Deviations by Carriers from Operating
Authorities in Described Circumstances. - Subject to the special rules,
requirements, and conditions governing particular situations hereinafter
stated, and subject also, when reference is made thereto, to the general
conditions and requirements set forth in subsection (d) of this rule, carriers
holding operating authority from this Commission, are hereby authorized, in the
circumstances hereinafter described, to deviate from their specifically
authorized regular service routes, and otherwise to depart from their specific
authority, in the circumstances and to the extent hereinafter stated without
obtaining other prior specific authority therefor:

(1) Redesignated Highways. - Where a carrier is
authorized to operate over a specified highway and thereafter that highway or a
segment thereof without relocation is redesignated, the carrier in order to
facilitate appropriate corrections in its certificate and changes in the
records of the Commission, shall so advise the Commission, by letter, giving
sufficient information regarding the old and new designation, the points
between which the highway designation has been changed, and the place or places
where such highway is referred to in the carrier's authority. The new
designation of the highway will be shown in the carrier's certificate when the
Commission has occasion to reissue it.

(2) Relocated Highway and Abandonment of Old
Highway. - Where a carrier is authorized to operate over a specified highway
and thereafter that highway or a segment or segments thereof are relocated, and
where the old highway or any segment thereof is no longer maintained for use by
the general public, the carrier may operate over such relocated highway or
relocated segment or segments under its authority without notice to the
Commission of such change, and in so doing may serve as intermediate or off‑route
points, on or from, the new highway, those points previously authorized to be
served as intermediate or off‑route points on or from the old highway,
provided there is no other change in the service previously rendered in
connection with operations over the old highway.

(3) Relocated Highway and Maintenance of Old
Highway under New Designation.

a. Where a carrier is authorized to operate
over, and to serve points on, a specified highway and thereafter that highway
or segment or segments thereof are relocated, but the old highway is maintained
for use by the general public under a new designation, the carrier shall not,
without first obtaining specific authority from the Commission, transfer its
operations to the relocated highway or relocated segments thereof, but must
continue to operate over the old highway and advise the Commission of the
change in the designation thereof, furnishing the same information as required
in connection with subdivision (1) of this subsection. The new designation of
the highway will be shown in the carrier's certificate when the Commission has
occasion to reissue it.

b. Where a carrier is authorized to operate
over a specified highway, but is not authorized to serve any point on such
highway, and thereafter such highway or a segment or segments thereof are
relocated, but the old highway is maintained for use by the public under a new
designation, the carrier may, if it so desires, use as its operating route only
the new or relocated highway, provided, it promptly advises the Commission of such
change, giving descriptions of the old and new highways between the points
involved and the other information required by subdivision (1) of this
subsection.

(4) By‑Pass Routes. - Where a by‑pass
route has been designated to be used for the purpose of avoiding a congested
area or areas, a carrier having an authorized regular route, or alternate
route, through such area or areas, which desires to use such by‑pass
route as an alternate route, may do so subject to the general conditions and
requirements set forth in subsection (d) of this rule.

(5) Detour Routes. - When a federal, state,
county or other government official, in the exercise of his powers, temporarily
prohibits the use by a regular route carrier of an authorized service route or
a segment or segments thereof, or when operations by a regular route carrier
over an authorized service route or a segment or segments thereof are
temporarily obstructed or rendered unsafe by any cause over which the carrier
has no control, or when a highway or a segment thereof which comprises all or
any portion of a carrier's authorized regular service route is, by appropriate
authority, made subject to weight or other restrictions which temporarily
prevent the operation of the equipment regularly and normally used by the
carrier over that route, and when, because of any one or more of the foregoing,
a detour route has been officially designated by proper authority for public
use in lieu of the closed, obstructed, unsafe, or restricted highway, the
carrier may use such officially designated detour route in lieu of the
temporarily closed, obstructed, unsafe, or restricted highway, provided (i)
that no service is rendered at any point the carrier is not specifically
authorized to serve, (ii) that, so far as suitable detour routes are available,
the carrier continues to furnish reasonable and adequate service at all points
it is authorized to serve, and (iii) that if use of the detour route will
continue for more than 30 days and if the distance over the detour route is
less than 90 percent of the distance over the authorized service route, a
statement shall be obtained from the governmental authority exercising control
over the highways involved and filed by the carrier with the Commission,
together with a notice in writing of its intent to use such detour route under
authority of this subdivision, which notice shall show the nature of the
condition which prevents operation over the authorized route, the period of
time it is anticipated that the service route will not be usable and proper
identification of the official detour route. Where a detour route is used under
the provisions of this subdivision, the carrier shall discontinue operations
over such route and resume operations over its authorized service route immediately
upon removal of the condition which necessitated use of the detour route.

(6) Alternate Routes for Operating Convenience
Only.  Where a regular route motor carrier is authorized to operate
over a regular service route and there is wholly within the State of North
Carolina another highway which extends in the same general direction as such
regular service route and affords a reasonably direct and practicable route
between any two points on such regular service route, it may, subject to the
general conditions and requirements set forth in subsection (d) of this rule,
use such other highway as an alternate route for operating convenience only,
with no service at any intermediate point thereon, and with no service at the
termini except as otherwise authorized, in the manner and to the extent, as
follows:

a. Superhighways as alternate routes.
 Where a regular route motor carrier is authorized to operate over a
regular service route and there is extending in the same general direction as
such service route, and wholly within the State of North Carolina, a so‑called
superhighway, turnpike, thruway, freeway, or expressway, which is substantially
the same in purpose, design, and construction as the National System of
Interstate Highways, such superhighway, turnpike, thruway, freeway, or
expressway and such additional highways as it may be necessary to use in
traveling by the shortest practicable route between the carrier's authorized
regular service route and the superhighway, turnpike, thruway, freeway, or expressway
may be used as an alternate route between two points on the carrier's regular
service route regardless of the ratio of the distance over such alternate route
between the point of deviation and the point of return to the distance over the
carrier's regular service route between the same points, and regardless of
whether or not such alternate route crosses or intersects or passes over or
under, any other specifically authorized service or alternate routes of the
carrier at any place intermediate to the points of deviation and return:
Provided, that use of the alternate route will not materially change the
competitive situation between such carrier and any other.

b. Highways other than superhighways. - Where
a regular route motor carrier is authorized to operate over a regular service
route and there is extending in the same general direction as such service
route and wholly within the State of North Carolina, another highway which is
not a so‑called superhighway, turnpike, thruway, freeway, or expressway,
the carrier may use such other highway as an alternate route for operating
convenience only, provided (i) that the distance over such alternate route
between the points of deviation and return is not less than 90 percent of the
distance over the authorized regular service route between the same points, and
(ii) that such alternate route does not duplicate, or involve operations over,
any part of any authorized service route described in the carrier's certificate
and does not cross or otherwise intersect any authorized service route of the
carrier or pass through any authorized off‑route point or any part of
the commercial zone of any authorized point either off‑route or other,
except at the points of deviation and return.

c. For the purpose of this paragraph:

1. The crossing of another route by overpass
or underpass shall be deemed to be a crossing or an intersection except in
those instances where a transfer of a vehicle from one highway to the other at
a point of such underpass or overpass is physically impossible because of the
absence of any connecting access roads.

2. The prohibition against the inclusion of
any alternate route used under this paragraph of any part of any authorized
service route of the carrier shall not be deemed to prohibit the inclusion of
an alternate route used under this paragraph, of a segment of the specifically
authorized alternate route, provided, the distance over the alternate route
used under this paragraph is computed from point of deviation from a service
route to the point of return to the same service route, including the embraced
segment of the specifically authorized alternate route.

3. The prohibition against the crossing by any
alternate route used under this paragraph of any authorized service route shall
not be deemed to prohibit the crossing of a specifically authorized alternate
route.

(7) Deadheading Empty Vehicles. - A motor carrier
may deadhead empty vehicles over any highway, the use of which is necessary or
desirable to accomplish a reasonably direct and practicable movement thereof
between any two points incidental to either prior or subsequent transportation
in intrastate commerce.

(d) General Conditions and Requirements. - Where reference
is made thereto in subsection (c) of this rule governing particular situations,
the following general conditions and requirements shall be applicable and shall
be complied with as a condition to the granting of authority herein for the
particular deviation:

(1) Any proposed deviation under this rule,
except one over an alternate route under subsection (c)(6) of this rule, may be
instituted by a carrier without prior notice to the Commission.

(2) If a deviation proposed under this rule,
other than one under subsection (c)(6) of this rule, is to continue for not
more than 30 days, no notice to the Commission concerning it is required.

(3) If any deviation, other than one over an
alternate route under subsection (c)(6) of this section, is to continue for
more than 30 days, the carrier shall, not later than one day after the
deviation operations are begun, give notice thereof to the Commission and
others in the manner provided in subdivision (5) of this subsection, giving the
information therein required.

(4) When an alternate‑route deviation
under subsection (c)(6) of this rule is proposed, the carrier shall give prior
notice thereof to the Commission and to others in the manner provided in subdivision
(5) of this subsection. A summary of such notice must be prepared by the
carrier and published in a newspaper of general circulation in the area
involved and operation over such deviation route shall not, under any
circumstances, be commenced until the elapse of 30 days after the date of such
publication and if a protest against any such proposed deviation is filed
within such 30‑day period, the proposed deviation shall not be commenced
until the Commission has considered and overruled the protest and found that
the proposed deviation meets the requirements of, and is permissible under,
this rule.

(5) If notice of a deviation proposed under
this rule is required by either subdivision (3) or (4) of this subsection, it
shall contain:

a. A complete description by highway
designations of the carrier's authorized service route between the point of
deviation and the point of return, including authorized off‑route points;

b. A complete description by highway
designations of its proposed deviation route between the point of deviation and
the point of return;

c. A complete description by highway
designations of all segments of other specifically authorized service and
alternate routes, including authorized off‑route points, of the carrier
adjacent either to the authorized service route from which deviation is to be
made or to the proposed deviation route; and

d. Where the deviation is subject to a
comparative distance limitation, the distance (actual mileage) over any
proposed deviation route and also over the authorized regular service route
between the points of deviation and return shall be stated. Such distances
shall be computed not from municipal or commercial zone limits, but from actual
junction points of the carrier's specifically authorized service route and the
proposed deviation route, whether such junction points be within or without
city limits, and shall include that portion of any specifically authorized
alternate route which is embraced in any proposed alternate deviation route.

(6) The notice described in subdivision (5) of
this subsection shall be accompanied by a map on which there shall be shown so
much as may be practicable of the information required by that subdivision and
in case of an alternate‑route deviation under subsection (c)(6)(a) or (b)
of this rule, such map must clearly show in different colors the routes
involved and authorized off‑route points, including in each instance the
official highway designations of the authorized regular service route, from
which deviation is proposed, and other service routes of the carriers, if any,
in the area, also the highway designations of the proposed deviation route and
other specifically authorized alternate routes, if any, in the area, and the
distances (actual mileage) between the points of deviation and return (the
actual junctions) over the regular service route from which deviation is
proposed and over the deviation route.

(7) The notice of an alternate‑route
deviation required by subdivision (4) of this subsection shall also contain a
statement to the effect that the carrier filing it will continue to furnish
reasonable and adequate service from and to all authorized points on its
regular service route; that it will not serve any intermediate point or points
on such deviation route; and that deviation from its authorized regular service
route as proposed, will not enable it to render a materially different service
than that rendered over its regular service route or enable it to engage in
transportation between any points between which operation is not practicable
over its regular service route because of the circuitry or otherwise.

(8) The notice of any deviation required by
subdivision (3) or (4) of this subsection shall also contain a statement
indicating that a copy thereof, accompanied by a copy of the map required by
subdivision (5) of this subsection, has been served by mail or in person on the
following, listed by names and addresses in each instance:

All carriers which, after diligent
inquiry, have been found to be competitive with the carrier's proposed
operation over the deviation route.

(9) Where a notice of a deviation or proposed
deviation is required by subdivision (3) or (4) of this subsection and such
notice is not timely filed and served on competing carriers and others as
required by subdivision (8) of this subsection, any deviation operation begun
prior to the actual filing and service of notice is unauthorized and where a
notice though filed is defective for want of required information or
insufficient service on competing carriers, or for any other reason, it shall
be subject to rejection and if rejected, any deviation operation covered
thereby which has been begun, shall immediately be discontinued and shall not
be resumed until a sufficient notice has been filed and served on interested
parties as required by subdivision (8) of this subsection, and the carrier has
been notified by the Commission that the operation may be resumed.

(10) The right to operate over a deviation route
which is subject to the general conditions and requirements set forth in this
subsection shall continue only so long as the carrier is performing, when
required by this rule, reasonable and adequate service over specifically
authorized routes, and only so long as the conditions set forth in this rule
are observed.

(e) Protest and Replies Thereto. - Any person who considers
that he is or will be adversely affected by a deviation described or proposed
in any notice filed under subsection (d) of this rule may file at any time a
protest against such deviation. Such protest may be in the form of a letter,
but shall contain a recital of facts and information showing protestant's
interest and supporting his opinion that the facts and circumstances upon which
the right to deviate depends, are nonexistent, or have been incorrectly
described, or that the carrier filing the deviation notice has not met the
applicable conditions and requirements, and shall show that a copy thereof has
been furnished to the carrier filing the notice. If such a protest is filed,
the carrier which has filed the deviation notice may reply thereto within 20
days, after which the Commission will give due consideration to all facts of
record or otherwise available to it in the particular case, including the
notice and protest, and will make a determination in accordance therewith.

(f) Commission May Forbid Deviation. - The Commission may
forbid the commencement of operations over any deviation route under this rule,
or require discontinuance of any such operations already commenced, whenever,
in its opinion, such deviation results in inadequate service over specifically
authorized routes, or is unreasonable, undesirable, or otherwise repugnant to
the public interest, or is not in harmony with the general purpose and intent of
the rules and regulations established by this rule.

(a) The term "tariff" as used herein means a
publication containing the fares, charges, rules and regulations of a common
carrier of persons and baggage, or the fares, charges, rules and regulations of
intracity bus passenger carriers.

R4‑2 REQUIREMENTS
AS TO SIZE, FORM IDENTIFICATION AND FILING OF TARIFFS

(a) All tariffs and supplements thereto shall be in book,
pamphlet, or loose‑leaf form of size 8 x 11 inches, and shall be plainly
printed, planographed, stereotyped, or reproduced by other similar durable
process on paper of good quality. No alteration in writing or erasure shall be
made in any tariff or supplement thereto. The size requirement of this rule is
not applicable to railway express carriers.

(b) A margin of not less than five eighths of an inch,
without any printing thereon, shall be allowed at the binding edge of each
tariff or supplement thereto.

(c) An N.C.U.C. number or a tariff serial number of the
issuing carrier shall be shown on the title page of the tariff. The N.C.U.C.
numbers shall run consecutively beginning with the number immediately following
the last number utilized; or, if no tariffs have been issued previously, the
numbering shall begin with N.C.U.C. No. 1 and continue in consecutive order. If
issuing carrier uses a tariff number in lieu of an N.C.U.C. number, each tariff
must bear a serial number of the issuing carrier, and as each such tariff is reissued
the number must be retained and letter suffixes in sequence beginning with
"A" be added to the numeral; and when the alphabet is thus exhausted
the reissue of the tariff carrying the suffix "Z" will be given the
suffixes "A'', "B'', etc., thus starting over again with the
alphabet. Immediately under the N.C.U.C. number or the tariff serial number, as
the case may be, the N.C.U.C. number or the tariff serial number of the tariff
canceled thereby shall be shown. Revised pages to loose-leaf tariffs shall also
be properly identified.

(d) When it is desired to make changes in the rates,
ratings, rules, or other provisions of a tariff, other than a loose‑leaf
tariff, without reissuing the tariff, a supplement constructed generally in the
same manner as is the tariff which it supplements may be issued to the tariff.

(1) The supplement numbers of supplements
issued to a tariff may be designated on the upper right‑hand corner of
the title page as

Supplement No. 1

to

N.C.U.C. No. __

or may be designated in the upper
central portion of the title page; or if tariff bears no N.C.U.C. number the
first supplement number shall be designated immediately above the freight
tariff number, as

Supplement No. 1

to

Tariff No. __

(2) Subsequent supplements shall be numbered
consecutively in like manner. Each supplement shall specify on its title page
immediately under the supplement number and N.C.U.C. number or tariff number of
the tariff supplemented, the publications which the supplement cancels and
shall also specify the supplements that are in effect.

(3) When purely intrastate supplements are
issued to tariffs containing both interstate and intrastate rates, ratings,
rules or other provisions, such supplements may be assigned the number of the
last I.C.C. supplement with capital letters of the alphabet (used
consecutively) added, such as "5A'', except that if any intrastate
supplements be issued prior to Supplement No. 1, such intrastate supplements
are to be identified with capital letters of the alphabet used consecutively,
such as "A'', "B'', etc.

(4) The matter contained in each supplement
shall be arranged in the same general manner and order as in the tariff which
it amends and when points in a tariff are given index or item numbers the same
index or item number, as the case may be, must be assigned to the same point in
all supplements to the tariff.

(5) Except as may be otherwise provided in
these rules, a tariff of six (6) pages or less may not have in effect at any
time more than two (2) supplements; not more than three (3) supplements may be
in effect at any time to a tariff containing seven (7) and not more than
sixteen (16) pages; not more than four (4) supplements may be in effect at any
time to a tariff containing seventeen (17) and not more than eighty (80) pages;
not more than five (5) supplements may be in effect at any time to a tariff
containing eighty‑one (81) and not more than two hundred (200) pages, and
not more than six (6) supplements may be in effect at any time to a tariff
containing more than two hundred (200) pages. The supplemental matter
hereinabove mentioned may in the aggregate be not more than fifty (50) percent
of the number of pages in the involved tariff including the title page thereof,
except it may exceed the volume authorized only to the extent necessary to
complete the page of supplemental matter when the tariff is not evenly
divisible to equal fifty (50) percent. For example, a tariff with nineteen (19)
pages, title page inclusive, may not have in effect at any time more than four
(4) supplements thereto or an aggregate of ten (10) pages of supplemental
matter. Except further, that suspension supplements and supplements containing
only suspended matter and issued as a result of an order of the North Carolina
Utilities Commission shall not be included in the number of supplements or
aggregate of pages of supplemental matter as hereinabove enumerated. Except
further, that the title page of no supplement shall be included in the
aggregate of the supplemental matter.

(e) Except as otherwise provided in this rule, each carrier
shall file tariffs and supplements under consecutive N.C.U.C. numbers, tariff
numbers, or supplement numbers. If, for any reason this is not done, the tariff
or supplement which is not numbered consecutively with the publication last
filed must be accompanied by a memorandum explaining why consecutive numbers
were not used.

(f) On the upper central portion of the title page shall be
shown the name of the issuing carrier. When an individual or partnership
operates under a trade name, the individual name or names shall precede the
trade name (See G.S. 66‑68 et seq.).

(g) When one or more carriers participate in an individual
carrier tariff, the individual names and firm names or (in the case of
corporations) corporate names of the participating carriers, and the cities and
states in which their principal offices are located, shall be alphabetically
arranged in such tariff.

(h) Issuing carriers shall transmit to the Commission six
(6) copies of each tariff, supplement, or revised page. All copies shall be
included in one package, accompanied by a letter of transmittal in triplicate,
listing all tariffs enclosed and addressed to the Public Staff - North Carolina
Utilities Commission, Transportation Rates Division, 4326 Mail Service Center,
Raleigh, NC 27699-4326. All postage, etc., must be prepaid.

(a) Except as provided by Rule R4-4(b), all tariffs and
supplements shall be filed with the Commission at least 30 days before the date
upon which they are to become effective.

(b) A carrier shall post and file in a place accessible to
the public, at each of its stations or offices which is in charge of a person
employed exclusively by such carrier or by it jointly with one or more other
carriers and at which persons or property is received for transportation, all
of the tariffs containing fares, rates, charges, classifications, and rules or
other provisions applying from, or at, such station or office. Each carrier
shall also maintain at its principal office in North Carolina a complete file
of all tariffs issued by it or by its agents in a place accessible to the
public, and employees of the carrier shall be required to give any desired
information contained in such tariffs, to lend assistance to seekers of
information therefrom, and to afford inquirers opportunity to examine any of
such tariffs without requiring the inquirer to assign any reason for such
desire.

(a) Written notice, in triplicate, containing a brief
explanation of the character of and reason for any intended changes in tariff
schedules shall be filed with the Commission not later than the date said
schedule is filed.

(b) Applications for permission to change or establish
rates, rules, or other provisions on less than statutory notice, or for waiver
of the provisions of these rules must be made by the carrier holding authority
to file the proposed publication.

(c) Six (6) copies of applications (including amendments
thereto and exhibits made a part thereof) shall be sent to the Public Staff
North Carolina Utilities Commission, Transportation Rates Division, 4326 Mail
Service Center, Raleigh, NC 27699-4326. The application should set forth full grounds
for the relief sought. If the authority granted by special permission is used,
it must be used in its entirety.

(d) All tariffs, supplements and revised pages shall
indicate changes from preceding issues by a printer's tear drop symbol or (R)
to denote reductions, a symbol in the shape of a diamond or (A) to denote
increases or a symbol in shape of a triangle or (C) to denote changes resulting
in neither increases nor reductions. The proper symbol must be shown directly
in connection with each change.

(a) Upon receipt of an order of suspension of any
publication in part or in its entirety, the carrier who filed such publication
shall immediately file with the Commission a consecutively numbered supplement
which must not bear an effective date, quoting in full the Commission's order
of suspension. Such supplement shall give specific reference by N.C.U.C. number
or tariff serial number or numbers to the tariff or tariffs, schedule or
schedules or supplements thereto or revised pages where rates, fares, charges,
classifications, rules, regulations or practices so continued in effect will be
found.

(b) If prior to the filing of the supplement announcing
suspension a carrier files a later supplement which contains as reissues, the
matter suspended in the previous supplement, the suspension supplement shall
also specifically suspend such reissued matter.

(c) When a schedule, tariff (or supplement) which is
suspended in part is reissued, such reissue shall cancel the schedule, tariff
(or supplement) containing the suspended matter "except portions under
suspension in docket No. . . ." When a schedule or tariff which is
suspended in part is reissued, such reissue shall also cancel the schedule or
tariff containing the matter which is continued in effect by reason of the
suspension. When a schedule or tariff, as to which a supplement is suspended in
whole or in part, is reissued, the reissue shall cancel the schedule or tariff
"except portions under suspension in supplement No. . . . (or in item No.
. . . of supplement No. . . .) in Docket No. . . ." and shall reissue the
matter which is continued in effect by the suspension.

(d) A suspended rate, fare, charge, classification, rule,
regulation, or practice may not be changed or withdrawn or the effective date
thereof further deferred except by order or special permission of the
Commission, nor may any change be made in a rate, fare, charge, classification,
rule, regulation, or practice which is continued in effect as a result of such
suspension except under order or special permission of the Commission.

(e) When the Commission vacates an order of suspension as of
a date earlier than the date to which suspended, the carrier who filed such
suspended schedule, tariff, supplement or revised page may file with the
Commission, on not less than one day's notice, unless otherwise provided by the
order, a supplement stating the date upon which, under authority of the
vacating order, the schedule, tariff, supplement, revised page, item, rate,
fare, charge, classification, rule, regulation, or practice will become
effective. Unless such supplement is filed naming an earlier date than the date
to which suspended, the suspended matter will become effective on the date to
which suspended.

(f) When an order which suspended a schedule or tariff in
its entirety is vacated, the vacating supplement, if made effective on or
before the date to which the schedule or tariff is suspended, may also include
as reissues, changes or additions which have been lawfully established in
supplements to the former schedule or tariff. If a new schedule or tariff has
been filed during the period of suspension, canceling the schedule or tariff
proposed to be canceled by the suspended schedule or tariff any changes or
additions published in the new schedule or tariff which are not included in the
suspended schedule or tariff may be included in the vacating supplement as
reissued items, provided the vacating supplement also cancels such new schedule
or tariff. No other matter may be included in vacating supplements.

(g) When a schedule or tariff containing suspended matter
has been canceled by a new schedule or tariff, except as to portions under
suspension, and the Commission vacates its suspension order in its entirety
effective on a date subsequent to the effective date of the new schedule or
tariff, a supplement must be filed to the new schedule or tariff effective on
not less than one day's notice, republishing and establishing the suspended
matter and canceling the matter which was effective during the period of
suspension, also canceling the matter under suspension in the former issue.
Unless this is done, the matter which was suspended will not become applicable
as the effective matter in the new schedule or tariff remains in effect until
canceled. When the Commission vacates its suspension order effective on a date
prior to the effective date of the new schedule or tariff, a vacating
supplement, as prescribed in this order, should be filed to the old schedule or
tariff and a supplement should also be filed to the new schedule or tariff on
not less than one day's notice, establishing therein on the effective date
thereof, matter which was under suspension in the old schedule or tariff.

(h) When the Commission orders the cancellation of a
schedule or tariff, supplement, revised page, item, rate, fare, charge,
classification, rule, regulation, or practice theretofore suspended by it the
cancellation shall be effected by filing with the Commission upon not less than
one day's notice, unless otherwise provided by the order, a supplement stating
the date upon which in accordance with the Commission's order said rate, fare,
charge, classification, rule, regulation, or practice is canceled; except that,
when desired, such cancellation may be accomplished in a new schedule or tariff
canceling the schedule or tariff containing the suspended matter. When an order
of the Commission requires the cancellation of suspended matter on or before a
date which is subsequent to the date to which suspended, carriers should
endeavor to make the cancellation effective prior to the date to which the
matter was suspended, in order to prevent the rates which have been found not
justified from becoming effective. If the suspended matter is not canceled on
or before the date to which suspended, it will be necessary, when canceling the
suspended matter, to republish and reestablish the matter continued in force
during the period of suspension.

(i) These provisions relating to suspension, vacating, and
cancellation supplements will also govern in connection with schedules or
tariffs issued in loose-leaf form, except that such supplements must not
contain rates, fares, charges, classifications, rules, regulations, or
practices. All changes made in loose-leaf schedules or tariffs must be
published on revised pages.

(NCUC Docket No. T-100, Sub 49, 01/09/04.)

R4-06 Adoption notices

(a) When the name of a carrier is changed, or when its
operating control is transferred to another carrier, the carrier which will
thereafter operate the properties shall file with the North Carolina Utilities
Commission, Transportation Rates Division, and post as required in Rule R4-3
(b) an adoption notice in the form of a tariff numbered in its N.C.U.C. series
and containing substantially the following:

(Name, also trade name, if any, of adopting carrier) hereby
adopts, ratifies, and makes its own, in every respect as if the same had been
originally filed and posted by it, all tariffs, classifications, rules,
notices, traffic agreements, statements of divisions, powers of attorney,
concurrences, or other instruments whatsoever, including supplements or
amendments thereto, filed with the North Carolina Utilities Commission by, or
heretofore adopted by (name and trade name, if any, of former carrier.)

(b) In addition to the above adoption notice the adopting
carrier shall immediately file, with the North Carolina Utilities Commission,
Transportation Rates Division, and post as required in Rule R4-3 (b), a
consecutively numbered supplement to each of the effective tariffs issued or
adopted by its predecessor, reading as follows:

Effective (Here insert date shown in the adoption notice)
this tariff, or as amended, became the tariff of (name and trade name, if any,
of the adopting carrier) as stated in its adoption notice N.C.U.C. No. . . .

(c) Notices of adoption shall be filed and posted
immediately and if possible on or before the date shown therein. Copies shall
be sent to each carrier to which power of attorney or concurrence has been
given the adopted carrier. The effective date shall be the date (as shown in
the body of the notice) on which the change in name or operation occurs, except
that if prior approval of such change by the North Carolina Utilities
Commission is required, the effective date shown shall not antedate that
approval.

(d) Adoption notices issued under the authority of this rule
shall contain no other matter.

In applying rates from points of origin in North Carolina to
destinations within the State, on intrastate traffic, rates shall in no case
exceed commodity rates on like traffic from or to more distant interstate
points from or to which there are published through commodity rates and from or
to which the intrastate origin or destination is directly intermediate via the
rate making line or lines from or to the more distant interstate points.

R4‑09 ALTERNATE APPLICATION OF COMBINATION
RATES

If the charge based on the aggregate of intermediate local,
joint or proportional rates approved or prescribed by the Commission, is lower
than the charge accruing under the through rates approved or prescribed from
origin to destination, such lower charge will be the legal charge to apply.

R4‑10 COMPUTATION OF TIME

Transportation tariffs received by and filed with the
Transportation Rates Division not later than noon of a workday will be stamped
as received on the last preceding workday provided such workday does not
precede in time the issuance date of the publication. Such publications
received by or filed with the Commission on an afternoon of a workday will be
stamped as received the day on which filed. The date tariffs are stamped as
received shall be counted as a day of notice but the effective date of said tariffs
shall not be counted. G.S. 62-134 and such orders issued thereunder will be
considered complied with when such publications are on file with the Commission
for the authorized period of time.

(a) No carrier holding a franchise certificate has the
right to issue an embargo on intrastate traffic against any carrier or any
goods except upon application to, and approval by, the North Carolina Utilities
Commission.

(b) A franchise certificate grants certain rights and the
rights so granted therein presuppose a service to be rendered, and any embargo
establishes a condition which the carrier does not have the right to impose;
therefore, where the carrier desires to embargo any shipments, application must
be made to the Commission for approval, and then the Commission will pass upon
the necessity therefor.

(c) The procedure to be followed in connection with an
embargo will be for the carrier desiring to establish same to notify the
Commission in a letter, sending a copy of said letter to any and all carriers
affected, after which the carriers receiving such notice shall have three days
within which to advise the proponent and the Commission of their attitude
thereon, after which the Commission will notify all parties to the proceeding
if it desires to hold a public hearing thereon.

(a) Any passenger ferry operating as a common carrier as
defined by G.S. 62-3(6) may apply pursuant to NCUC Rule 4-4 for approval of a
fuel surcharge.

(b) The application shall specify the fuel cost per gallon
expressed to three decimal places that is proposed to be used as the basis of
determining the fuel surcharge. In addition, although no single data point or
price index will be mandated by this procedure, the application shall include
documentation of its fuel prices during, at least, the previous six months
and/or government or industry fuel cost forecasts in support of the fuel cost
per gallon proposed by the applicant.

(c) The surcharge shall be computed in the manner set forth
in Exhibit A of the Commission's Order issued January 28, 2009 in Docket No.
A-100, Sub 0, unless otherwise ordered by the Commission. The base period used
for computing the surcharge shall be the calendar year 2004 or the test year
from the ferry operator's most recent rate case, whichever is later. If
calendar year 2004 is used, the base period cost shall be calculated by
dividing the total annual expense for the purchase of fuel in calendar year
2004 to operate the ferries by the number of gallons purchased during that
period.

(d) Applications for a fuel surcharge increase may be filed
no more frequently than every three months. Applications for a fuel surcharge
shall be considered at the Commission's Staff Conference within two weeks of
the date of filing. Upon approval of the surcharge, the ferry operator may
implement the surcharge, effective the first day of the month following the
ferry operator's filing the revised tariff rate schedules reflecting the
surcharge with the Chief Clerk of the Commission.

(e) If the ferry sells an annual pass or other approved
means of paying for transportation that are not individual single- or
round-trip tickets, the surcharge shall apply only to the price of such passes
sold following the approval of any surcharge and shall be equivalent to the
approved surcharge at the time of sale multiplied by the projected average
number of trips per passholder in the class of such passholders during the
valid period of the pass. For purposes of calculating the number of customers,
it will be assumed that each passholder travels the average number of trips (to
be reflected in the number of customers) by all passholders in the class of
such passholders during the valid period of the pass, calculated using historic
ridership data.

(f) Any ferry operator implementing a fuel surcharge shall
establish a fuel tracking account to account for the difference between the
amount of fuel costs collected from customers as compared to the amount of fuel
costs incurred by the carrier. A quarterly report on the activity recorded in
a fuel tracking account shall be filed with the Commission within 45 days after
the end of each calendar quarter in the manner set forth in Exhibit B of the
Commission's Order issued January 28, 2009, in Docket No. A-100, Sub
0, unless otherwise ordered by the Commission. The balance of the fuel tracking
account shall be considered in determining the amount of the fuel surcharge
after the initially approved fuel surcharge.

(g) Applications or petitions for changes in the fuel
surcharge may be filed by the ferry operator, the Public Staff, the Attorney
General, or other interested parties.

(h) Copies of any application for a surcharge and for
change in the surcharge shall be served upon the Public Staff, the Attorney
General, and other party requesting a copy. Persons desiring a copy who notify
the Chief Clerk of the Commission in writing shall be placed on a service
list.

(NCUC Docket No. A-100, Sub 0, 01/29/09.)

EXHIBIT A

FORMULA TO DETERMINE FUEL SUCHARGE

AND FUEL COMPONENT OF RATES

FOR FERRY OPERATORS

FUEL SURCHARGE:

A.Proposed Fuel Cost per Gallon for Surcharge $_____

B.Base Period Cost per Gallon $_____

C.Increase in Fuel Cost per Gallon (A – B) $_____

D.Gallons Purchased in Base Period
_____

E.Annualized Increase in Cost of Gallons Purchased (C x D) $_____

F.Balance in Fuel Tracking Account $_____

G.Amount Used for Computing Surcharge (E + F) $_____

H.Number of Customers in Base Period
_____

I.Computed Surcharge per Customer (G/H) $_____

FUEL COMPONENT OF
RATES:

A.Proposed Fuel Cost per Gallon for Surcharge $_____

B.Gallons Purchased in Base Period _____

C.Annualized Fuel Costs (A x B) $_____

D.Balance in Fuel Tracking Account $_____

E.Tracked Fuel Costs (C + D) $_____

F.Number of Customers in Base Period
_____

G.Fuel Cost Component of Rates (E/F) $_____

EXHIBIT B

[Name of Ferry Operator]

Quarterly Fuel Surcharge Tracking Report

For the Reporting Quarter Ended _________________

Balance at the
beginning of the quarter – Under (Over) Collection $_______

Fuel costs paid
to vendors:

1.Gallons purchased
_______

2.Actual fuel costs paid $_______

Fuel costs
collected from customers:

1.Number of customers
_______

2.Fuel cost component of rates X $_______

3.Fuel costs collected $_______

Under (Over)
Collection of fuel costs for the quarter [B-C] $_______

Balance at the end
of the quarter – Under (Over) Collection [A+D] $_______

CERTIFICATION

I hereby certify that the information contained in this
report is true to the best of my knowledge and belief.

_______________________________ ________________

Authorized
Signature and Title Date

_______________________________ (_____)___________

Contact
Person (Print Clearly) Telephone
Number

NOTE: Providing false information to the Commission is
punishable by fine and/or imprisonment pursuant to G.S. 62-310 and 62-326.

These rules apply to any gas utility operating within the
State of North Carolina under the jurisdiction of the North Carolina Utilities
Commission and also to interstate natural gas companies having pipeline
facilities located in North Carolina insofar as safety is concerned.

(1) These rules are intended to promote safe
and adequate service to the public, to provide standards for uniform and
reasonable practices by utilities, and to establish a basis for determining the
reasonableness of such demands as may be made by the public upon the utilities.

(2) If unreasonable hardship to a utility or to
a customer results from the application of any rule herein prescribed,
application may be made to the Commission for the modification of the rule or
for temporary or permanent exemption from its requirements.

(3) The adoption of these rules shall in no way
preclude the Commission from altering or amending them, or from making such
modifications with respect to their application as may be found necessary to
meet exceptional conditions.

(4) These regulations shall in no way relieve
any utility from any of its duties under the laws of this State.

(NCUC Docket No. G‑100, Sub 9, 7/26/67.)

R6‑02.1. Repealed by NCUC Docket No. G-100, Sub
79, 12/02/99

R06-02 DEFINITIONS

(a) "Utility" means any gas company operating
under the jurisdiction of the Commission, including in the case of safety rules
and regulations, any interstate pipeline company subject to the safety
jurisdiction of the Commission pursuant to G.S. 62 50.

(b) "Customer" means any person, firm,
association, or corporation, or any agency of the federal, State, or local
government, being supplied with gas service by a gas utility.

(c) "Premises" means a piece of land or real
estate, including buildings and other appurtenances thereon.

(d) "Gas plant" means all facilities owned by a
gas utility for the production, storage, transmission, and distribution of gas.

(e) "Main" means a gas pipe, owned, operated, or
maintained by a utility, which is used for the purpose of transmission or
distribution of gas, but does not include "gas service line."

(f) "Gas service line" is the pipe that runs
between a main or a pipeline and a customer's meter.

(g) "Meter," without other qualification, shall
mean any device, or instrument which is used by a utility in measuring a
quantity of gas.

(h) "Check flow" means a flow at approximately
20% of the rated capacity of a meter at a pressure of 1-1/2" water column
on prover.

(i) "Full rated flow" means a flow of 100% of the
rated capacity of meter at a pressure of 1-1/2" water column on prover.

(j) "Open rated flow" means a flow with meter
outlet unrestricted at a pressure of 1-1/2" water column on prover.

(k) "Cubic foot" of gas as used in these rules
shall have the following meanings:

(1) Where gas is supplied and metered to
customers at the pressure normally used for domestic customers' appliances, a
cubic foot of gas shall be that quantity of gas which, at the temperature and
pressure existing in the meter, occupies one cubic foot.

(2) When gas is supplied to customers at other
than the pressure in (1) above, a cubic foot of gas shall be that quantity of
gas which, at a temperature of 60° F. and a base pressure of 14.73 pounds per
square inch absolute, occupies one cubic foot, atmospheric pressure assumed to
be 14.73.

(3) The standard cubic foot of gas for testing
the gas itself for heating value shall be that quantity of gas, saturated with
water vapor, which at a temperature of 60° F. and a pressure of 30 inches of
mercury, occupies one cubic foot. (Temperature of mercury = 32° F. acceleration
due to gravity = 32.17 feet per second; density 13.595 grams per cubic
centimeter).

(l) "Interruption of service" means any
disturbance of the gas supply whereby the pilot flame on the appliances of at
least 50 customers shall have been extinguished.

All records required by these rules, or necessary for the
administration thereof, shall be kept within this State, unless otherwise
authorized by the Commission. These records shall be available for examination
by the Commission, the Public Staff, or their authorized representatives at all
reasonable hours.

(NCUC Docket No. M‑100, Sub 75, 10/27/77.)

R6‑04 RETENTION OF RECORDS

Unless otherwise specified by the Commission, all records
required by these rules shall be preserved for the period of time specified in
the current edition of the National Association of Regulatory Utility
Commissioners' publication "Regulations to Govern the Preservation of
Records of Gas, Electric and Water Utilities."

(NCUC Docket No. G-100, Sub 74, 12/4/97.)

R6‑05.1 NOTICE OF TARIFF CHANGES

Each tariff filing involving any change in any existing
tariff, whether made in the context of a general rate case or any other type of
proceeding, shall include a copy of the existing tariff showing by cross‑outs
and italicized inserts all proposed changes in rates, charges, terms and
conditions, service rules and regulations, and other text.

(NCUC Docket No. G‑100, Sub 46, 1/21/87.)

R06-05 DATA TO BE FILED WITH THE COMMISSION

The utility shall file with the Commission the following
documents and information, and shall maintain such documents and information in
a current status:

(1) A copy of the utility's tariff, including the
utility's rules, or terms and conditions describing the utility's policies and
practices in rendering service. These rules shall include:

a. The standard total heating value of the gas
in BTUs per cubic foot. If necessary, this may be listed by district,
division, or community.

b. The list of the items which the utility
furnishes, owns, and maintains on the customer's premises, such as gas
services, meters, regulators, vents, and shut-off valves.

c. General statement indicating the extent to
which the utility will provide free service in the adjustment of customer's
appliances.

d. General statement of the utility's policy
in making adjustments for wastage of gas when such wastage occurs without the
knowledge of the customer.

e. A statement indicating the minimum number
of days allowed for payment of the gross amount of the customer's bill before
service will be discontinued for nonpayment.

(2) A copy of each special contract for service.

(3) A copy of each type of customer bill form.

(4) A map showing the utility's operating area. This
map shall be revised annually unless such revision is unnecessary, in which
event the utility shall notify the Commission that the map on file is current.
The map should show:

a. Gas production plant.

b. Principal storage holders.

c. Principal transmission and distribution
mains by size.

d. System metering (supply) points.

e. State boundary crossings.

f. Franchise area.

g. Names of all communities (post offices)
served.

(5) The name, title, address, and telephone number of
the person who should be contacted in connection with:

a. General management duties.

b. Customer relations (complaints).

c. Engineering operations.

d. Meter tests and repairs.

e. Emergencies during nonoffice hours.

(6) A copy of the utility's construction and
operational budget filed annually by said utility.

b. These reports shall be due in the
Commission's offices within thirty (30) days after the end of the month
reported.

(8) The responsibility for the maintenance of necessary
records to establish that compliance with these rules has been accomplished
rests with the utility. Such records shall be available for inspection at all
times by the Commission or the Commission Staff or the Public Staff.

(9) Two copies of annual report on forms furnished by
the Commission.

(10) a. At
least 30 days prior to the construction or major reconstruction of any gas
pipeline or main intended to be subjected to pressures in excess of 100 psig, a
report shall be filed with the North Carolina Utilities Commission setting
forth the specifications for such pipeline or main.

b. The Commission shall be advised with at
least 24 hours' notice prior to the testing of any gas pipeline or main
intended to be subjected to pressures in excess of 100 psig.

c. Within 60 days after the construction of
any gas pipeline or main intended to be subjected to pressures in excess of 100
psig is placed in operation, a report shall be filed with the North Carolina
Utilities Commission certifying the maximum pressure to which the line is
intended to be subjected and also certifying that the pipeline has been
constructed and tested in accordance with the requirements of the rules herein
prescribed, which report shall include the results of all tests made pursuant
thereto. No gas pipeline shall be operated at pressures in excess of the
pressure for which it was certified to the North Carolina Utilities Commission.

(11) Each franchised natural gas local distribution
company (LDC) shall file reports with the Commission detailing its plans for
providing natural gas service in unserved areas of its franchised territory.
Such reports shall be updated at least every two years on or before October 31
of odd numbered years and, at a minimum, shall include the following:

(a) A map or maps that show the LDC's existing
franchise area and areas where gas is currently available, including
municipalities and unincorporated areas, and the locations of transmission and
high pressure distribution mains outside of corporate limits.

(b) If the LDC had a project to serve an
unserved area in progress at the time the immediately preceding report was
filed, a description of each such project, including, as appropriate, its
current status and its estimated date of completion.

(c) A summary of all requests or inquiries about
service from potential large commercial and industrial customers considering
locations not economically feasible to serve under the LDC's approved plan for
the extension of mains and service lines.

(d) If the LDC has no unserved areas, the report
should so state and no further information, beyond that required above, is
required to be included.

(e) If the LDC has one or more unserved areas
within its franchise territory, the following additional information must be
included:

(i) A description of project(s) that would
extend natural gas to such unserved areas, including maps showing the proposed
routes for natural gas pipelines and the proposed timetable for completion of
the project(s). Said maps should show the areas in which the LDC plans to
offer natural gas service within the next three years, including the location
of proposed facilities, relative to currently served areas.

(ii) An explanation of the reason(s) it is not
proposing to extend natural gas service to each unserved area.

(iii) Construction budgets for each planned
project.

(iv) An estimate of the number of customers to be
served from each planned project, broken down as to customer class with
projected annual revenues from each class and total revenues from all projects
for each of the next three years subsequent to completion.

(v) A present value analysis for each planned
project.

(vi) A financing plan detailing the key terms for
possible sources of funds to finance each planned project, including natural
gas expansion funds, natural gas bonds, contributions in aid of construction,
various types of public financing, or issuances of debt, equity, and other
types of external financings.

(vii) All workpapers supporting the
determinations, analysis, or conclusions contained in the study or studies
shall be provided to the Commission and the Public Staff. If additional
information is required, each LDC will provide such information promptly upon
request to the Commission and the Public Staff.

(a) All gas sold by a utility shall be on the basis of
meter measurement unless otherwise authorized by the Commission.

(b) Wherever practicable, consumption of gas within the
utility itself, or by administrative units associated with it, shall be
metered.

R6‑07 METER READING SHEETS, CARDS OR DATA

The meter reading sheets, cards or data shall show:

(1) Customer's name, address, and rate
schedule.

(2) Identifying number and/or description of
the meter(s).

(3) Meter readings.

(4) If the reading has been estimated.

(5) Multiplier or constants should be shown if
applicable.

(NCUC Docket No. G-100, Sub 74, 12/4/97.)

R6‑08 METER READING INTERVAL

Meters shall be read monthly, except that authority may be
obtained from the Commission for reading the meters at other than monthly
intervals. As nearly as practicable, utilities shall avoid sending a customer
two successive estimated bills.

R6‑09 CONDITION OF METER

No meter shall be installed which is mechanically defective,
has an incorrect correction factor or has not been tested and adjusted in
accordance with Rule R6‑26. The capacity of the meter and the index
mechanism should be consistent with the gas requirements of the customer.

R6‑10 TEMPORARY SERVICE

When the utility renders temporary service to a customer, it
may require that the customer bear all the cost of installing and removing the
service in excess of any salvage realized.

R6‑11 EXTENSION PLAN

Each utility shall develop a plan, acceptable to the
Commission, for the installation of extensions of main and service lines where
such facilities are in excess of those included in the regular rates for
service and for which the customer shall be required to pay all or part of the
cost. This plan must be related to the investment that prudently can be made
for the probable revenue.

R6‑12 CUSTOMER INFORMATION

Each utility shall:

(1) Maintain up-to-date maps, plans, or records
of its entire transmission and distribution systems, with such other
information as may be necessary to enable the utility to advise prospective
customers, and others entitled to the information, as to the facilities
available for serving any locality.

(2) Assist the customer or prospective customer
in selecting the most economical rate schedule.

(3) Notify customers, as required by the
Commission, affected by a change in rates or schedule classification.

(4) Post a notice in a conspicuous place in
each office of the utility where applications for service are received,
informing the public that copies of the rate schedules and rules relating to
the service of the utility, as filed with the Commission, are available for
inspection.

(5) Upon request, inform its customers as to
the method of reading meters.

(6) Furnish such additional information as the
customer may reasonably request.

(7) During July and August of each year,
consumption for each customer for the twelve-months ending June 30 of such year
and the prior year shall be reviewed. If it is found that the customer has
either increased or decreased his annual consumption based on the two prior
years' consumption to the point it would place him on a different rate
schedule, the customer shall be automatically reclassified to the proper rate
schedule effective the following September 1. In determining consumption,
periods of involuntary curtailment shall be excluded.

Each customer reclassified under this rule shall be notified
of the change in rate schedule, along with a copy of the tariff sheets
applicable to his old and new rate schedules, at least twenty-one days prior to
the effective date of the change.

The utility shall bill each customer as promptly as possible
following the reading of his meter. The bill shall show:

(1) The reading of the meter at the beginning
and at the end of the period for which the bill is rendered.

(2) The date on which the meter was read at the
end of the billing period.

(3) The number of units metered.

(4) Identification of the applicable rate
schedule.

(5) The gross and/or net amount of the bill.

(6) The date by which the customer must pay the
bill in order to benefit from any discount or to avoid any penalty.

(7) A distinct marking to identify an estimated
bill.

(8) Any conversion from meter reading units to
billing units, or any calculations to determine billing units from recording or
other devices, or any other factors, such as purchased gas or fuel adjustments,
used in determining the bill. In lieu of such information on the bill, a
statement must be on the bill advising that such information can be obtained by
contacting the utility's principal office.

R6-15 ADJUSTMENT
OF BILLS DUE TO INACCURATE METERS FOR RESIDENTIAL AND SMALL COMMERCIAL
CUSTOMERS

Bills which are incorrect due to meter errors where the
meters in question have not been tampered with by the customer are to be
adjusted as follows:

(1) Meter Accuracy. - Whenever a meter in
service is tested and found to be accurate within 2%, there shall be no
adjustment to the customer's bill.

(2) Billing Adjustments. - Billing adjustments
due to fast or slow meters shall be calculated on the basis that the meter
should be 100% accurate. The actual accuracy shall be the accuracy determined
by averaging the results at the check and open rated flow.

(a) Fast Meters. - Whenever a meter in service
is tested and found to have overregistered more than 2%, the utility shall
adjust the customer's bill for the excess amount paid as determined below,
except that the utility need not adjust the customer's bill if the excess
amount paid is less than $5.00.

(i) If the time at which the error first
developed or occurred can reasonably be determined, the estimated amount of
overcharge is to be based on the actual period of the overcharge but not to
exceed a maximum of three (3) years from the discovery of the error.

(ii) If the time at which the error first
developed or occurred cannot reasonably be determined, the estimated amount of
overcharge is to be based on the most recent twelve (12) month period from the
discovery of the overcharge.

(iii) No part of the minimum bill or facilities
charge shall be refunded.

(iv) The utility shall not be required to make
refunds to more than the last two customers who purchased gas through a fast
meter as defined in the rule.

(b) Slow Meters. - Whenever a meter in service
is tested and found to have underregistered more than 2%, the utility shall
adjust the customer's bill for the deficient amount due as determined below
except that the utility need not adjust the customer's bill if the deficient
amount due is less than $5.00.

(i) Regardless of whether the time at which the
error first developed can or cannot reasonably be determined, the estimated
amount of undercharge may not exceed one (1) year.

(ii) When billing for the underregistered usage
and the undercharge exceeds $25.00, the utility shall allow the customer the
option of paying the undercharge in equal payments, without any penalty or
interest charges, for a period of time equal to the period during which the
meter underregistered, up to a maximum of one (1) year.

(c) Nonregistering Meters. - Whenever a meter is
found to be stopped, the utility may estimate and bill the customer the proper
charge for the unregistered service by reference to the customer's consumption
during similar normal periods or by such method as the Commission may authorize
or direct.

(i) The utility may backbill the customer from
the point in time the meter stopped, up to a maximum of twelve (12) months.

(ii) When billing for the nonregistered usage,
the utility shall allow the customer the option of paying the undercharge in
equal payments, without any penalty or interest charges, for a period not to
exceed the customer's next six (6) billing periods.

(NCUC Docket No. G-100, Sub 71, 8/1/96.)

R6‑16 REASONS FOR DENYING SERVICE

Service may be refused or discontinued for any of the
reasons listed below. Unless otherwise stated, the customer shall be allowed a
reasonable time in which to comply with the rule before service is
discontinued.

(1) Without notice in the event of a condition
determined by the utility to be hazardous.

(2) Without notice in the event of customer use
of equipment in such a manner as to adversely affect the utility's equipment or
the utility's service to others.

(3) Without notice in the event of tampering
with the equipment furnished and owned by the utility.

(4) Without notice in the event of unauthorized
use.

(5) For violation of and/or noncompliance with
these rules and regulations.

(6) For failure of the customer to fulfill his
contractual obligations for service and/or facilities subject to regulation by
the Commission.

(7) For failure of the customer to permit the
utility reasonable access to its equipment.

(10) For failure of the customer to furnish such
service equipment, permits, certificates, and/or rights‑of‑way, as
shall have been specified by the utility as a condition to obtaining service,
or in the event such equipment or permissions are withdrawn or terminated.

(NCUC Docket No. M‑100, Sub 28, 5/16/70.)

R6‑17 INSUFFICIENT REASONS FOR DENYING SERVICE

The following shall not constitute sufficient cause for
refusal of service to a present or prospective customer:

(1) Delinquency in payment for service by a
previous occupant of the premises to be served.

(2) Failure to pay for merchandise purchased
from utility.

(3) Failure to pay for a different type or
class of public utility service.

(4) Failure to pay the bill of another customer
as guarantor thereof.

R6‑18 CHANGE IN CHARACTER OF SERVICE

The following procedure shall be followed whenever there is
a material change in the character of the gas service:

(1) Changes under the Control of the Utility. -
The utility shall make such changes only with the approval of the Commission,
and after adequate notice to the customers.

(2) Changes Not under the Control of the
Utility. - The utility shall maintain the proper combustibility of the gas
supplied at the heating valve and specific gravity existing at the customers'
meters (See Rule R6‑34(b)).

R6‑19.1 PRIORITIES FOR LIMITATIONS
ON NEW SERVICE

(a) Any natural gas company in North Carolina placing any
limitations on sales of gas to new customers shall file within thirty (30) days
with this Commission a program for sales to new customers and additional sales
to existing customers as may be required because of insufficient gas supply,
which program shall provide the following order of priorities for such service:

(1) Gas service to all residential customers
requesting service who can be feasibly served, including multiple housing.

(2) Gas service to small commercial and small
industrial users whose requirements do not exceed 20 Mcf per day.

(3) Industrial customers utilizing natural gas
as a raw material or in direct application of gas flame where no other heat is
usable.

(b) Said natural gas utilities shall file such restrictive
sales program with this Commission in accordance with subsection (a) of this
rule in tariff form, including limitations of the size of interruptible
customers, if any, within 30 days after the date of this rule.

(c) All natural gas utility companies in North Carolina
without sufficient gas supply for peak‑day demand shall install as needed
sufficient peak‑shaving equipment to meet the needs of residential
customers.

(a) In the event that a North Carolina retail gas utility
cannot supply the demands of all its customers, the utility shall curtail the
customers paying the least margin per dekatherm first. This applies to all
customers, be they transportation customers, regular sales rate customers,
municipal customers or otherwise. However, if operating conditions require some
interruption of service to a particular geographical area instead of a
utility's entire system, then curtailment by margin should be applied only to those
customers within the affected areas.

(b) If it is necessary to interrupt some but not all
customers paying the same margin per dekatherm, then, to the extent
practicable, service shall be curtailed to the customers paying the same margin
per dekatherm on a pro rata basis for the season.

(c) For the convenience of wording in tariffs, the
following definitions of priorities by end use will be retained. However, these
priorities are not to be used for purposes of curtailment priorities unless the
Commission so orders pursuant to section (d) below.

Priority 2. Industrial
Less Than 50 Mcf/day. Process, Feedstock and Plant Protection With No Alternate
Fuel Capability. Large commercial requirements of 50 Mcf or more per day except
for large commercial boiler fuel requirements above 300 Mcf/day.

Service to
customers which consists of direct natural gas usage in residential dwelling
for space heating, air conditioning, cooking, water heating, and other
residential uses.

Commercial:

Service to
customers engaged primarily in the sale of goods or services, including
institutions and governmental agencies, for uses other than those involving
manufacturing or electric power generation.

Industrial:

Service to
customers engaged primarily in a process which creates or changes raw or
unfinished materials into another form or product, including the generation
of electric power.

Plant Protection
Gas:

Minimum
quantities required to prevent physical harm to the plant facilities or
danger to plant personnel when such protection cannot be afforded through the
use of an alternate fuel. This includes the protection of such material in
process as would otherwise be destroyed but shall not include deliveries
required to maintain plant production.

Feedstock Gas:

Natural gas used
as a raw material for its chemical properties in creating an end product,
including atmospheric generation.

Process Gas:

Gas use for
which alternate fuels are not technically feasible such as in applications
requiring precise temperature controls and precise flame characteristics.

Boiler Gas:

Gas used as a
fuel for the generation of steam or electricity, including the utilization of
gas turbines for the generation of electricity.

Alternate
Fuel Capability:

A situation
where the capability to burn a nongaseous fuel is actually installed.

Essential Human
Needs:

Hospitals,
nursing homes, orphanages, prisons, sanitariums, and boarding schools, and
gas used for water and sewage treatment.

Emergency
Service:

Service which if
denied would cause shut down of an operation which in turn would result in
plant closing.

Margin:

Margin is
defined as the filed tariff rate per unit of gas or negotiated rate per unit
of gas of a customer, less the cost per unit of gas as determined in the
Company's last general rate case or Purchased Gas Adjustment proceeding,
adjusted for any temporary decrements or increments in the filed tariff rate.

(d) The Commission may change the curtailment priority
system from one of curtailment by margin to curtailment by the end use
characteristics listed in the priorities defined in section (c) above, if the
Commission so orders, based on good cause shown, upon the Commission's own
motion or petition of any interested party. Notice and opportunity to comment
shall be given to all North Carolina retail gas utilities, the Public Staff,
the Attorney General, and any other parties within the Commission's discretion
before such change takes effect.

(e) For end users on the municipal gas systems served by
Piedmont Natural Gas Company, Inc. (Piedmont), curtailment shall be on the
basis of the combined margin they pay to the City and Piedmont (i.e., the rate
the end user is paying to the City behind Piedmont's system rather than the
rate the City is paying to Piedmont governs those customers' curtailment
priority).

(f) During July and August of each year, consumption for
each customer for the twelve-months ending June 30 of such year and the prior
year shall be reviewed. If it is found that the customer has either increased
or decreased his annual consumption based on the two prior years' consumption
to the point it would place him in a different priority classification, the
customer shall be automatically reclassified to the proper priority
classification effective the following September 1. In determining consumption,
periods of involuntary curtailment shall be excluded.

(a) The use of natural gas in torches be, and the same is
hereby, terminated. Each natural gas utility within ninety (90) days from the
date of this Order shall notify the customers affected by this Order and shall
eliminate all gas service being used in torches.

(a) Complaints concerning the charges, practices,
facilities or service of the utility shall be investigated promptly and
thoroughly. The utility shall keep such records of customer complaints as will
enable it to review and analyze its procedures and actions.

(b) A report of incorrectly adjusted appliances shall be
given prompt attention.

R6‑20 REQUIREMENT FOR GOOD ENGINEERING PRACTICE

The gas plant of the utility shall be constructed,
installed, maintained and operated in accordance with accepted good engineering
practice in the gas industry to assure, as far as reasonably possible,
continuity of service, uniformity in the quality of service furnished, and the
safety of persons and property.

R6‑21 ACCEPTABLE STANDARDS

Unless otherwise specified by the Commission, the utility
shall use the applicable provisions in the publications listed below as
standards of accepted good practice.

(2) The latest edition of the American
Standards Association pamphlet, ASA Z21.30, "Installation of Gas
Appliances and Gas Piping in Buildings," or the latest edition of the
National Board of Fire Underwriters publication, NFPA No. 54, "Piping,
Appliances and Fittings for City Gas."

(3) The current edition of the NFPA No. 59,
"The Storage and Handling of Liquefied Petroleum Gases at Utility Gas
Plants."

(4) "Standard Methods of Gas
Testing," Circular No. 48, National Bureau of Standards, 1961. (The
applicable portions of this circular have been substantially reproduced in the
American Meter Company Handbook E‑4, covering the testing of positive
displacement meters.)

The following publications have not been designated as
standards but they may be used as guides to acceptable practice:

(1) "Accuracy of the Recording Gas
Calorimeter When Used with Gases of High BTU Content," by John H. Eiseman,
National Bureau of Standards, and Elwin A. Potter, Gas Inspection Bureau of the
District of Columbia, AGA Publication No. CEP-55-13.

The production and/or storage capacity of the utility's
plant, supplemented by the gas supply regularly available from other sources,
must be sufficiently large to meet all reasonably expectable demands for firm
service.

R6‑24 INSPECTION OF GAS PLANT

Each utility must adopt a program of inspection of its gas
plant in order to determine the necessity for replacement and repair. The
frequency of the various inspections shall be based on the utility's experience
and accepted good practice. Each utility shall keep sufficient records to give
evidence of compliance with its inspection program.

ARTICLE 6

INSPECTIONS AND TESTS

R06-25 UTILITY INSPECTIONS AND TESTS

Each utility shall make inspections and tests of meters and
associated metering devices as follows:

(1) Pre-installation Inspections and Tests.

a. Every meter and/or associated metering
device shall be inspected, tested and sealed in the meter shop of the utility
before being placed in service, and the accuracy of each meter shall be within
the tolerances permitted by Rule R6-26.

b. New or reconditioned meters which have
been sealed at the factory need not be resealed in the meter shop of the
utility.

c. No meter shall be installed if it has been
tested as required in subdivision (1)a and held for a period longer than 270
days without retesting.

(2) Tests to Be Made after Removal of Meters from Service.
— All meters and/or associated metering devices shall be tested after they are
removed from service. Such tests shall be made before the meters and/or associated
metering devices are adjusted, repaired, or retired.

(3) Leak Tests. — Repaired meters, and meters that have
been removed from service, shall be leak tested prior to installation. New
meters shall be leak tested in accordance with a sampling method, acceptable to
the Commission.

a. Meters used for measuring low pressure gas
shall be tested and subjected to an internal pressure of at least 20" W.C.
and checked for the presence of leaks by one of the tests listed below.

b. Meters other than those which are covered
by subdivision (3)a of this rule shall be tested and subjected to an internal
pressure of 1.1 times the specified maximum working pressure of the meter if
shop tested or if such pressures are available in the field but under no less
than the available operating pressure if field tested and checked for the
presence of leaks by one of the following tests:

1. Immersion test.

2. Soap test.

3. Pressure drop test of a type acceptable to the
Commission.

(4) Request Tests. — Upon request by a customer and at no
charge, the utility shall make a test of the meter serving him, provided that
such tests need not be made more frequently than once in 18 months.

a. The customer, or his representative, may
be present when his meter is tested.

b. A report of the results of the test shall
be made to the customer within a reasonable time after the completion of the
test, and a record of the report, together with a complete record of each test,
shall be kept on file at the office of the utility.

(5) Periodic Tests. — These test periods may be extended
upon application to and approved by the Commission, provided that the utility
can prove by its own records that different test periods are adequate for the
protection of the public.

a. Positive displacement meters.

1. Up to 251 cfh (at .5 in water column differential
pressure with nonabsorptive diaphragm) — 7 years.

2. Up to 251 cfh (at .5 in water column differential
pressure with absorptive type diaphragm) — 5 years.

(a) Meters and/or associated metering devices shall be
tested at the points and adjusted to the tolerances prescribed below. The test
of any unit of metering equipment shall consist of a comparison of its accuracy
with the accuracy of a standard. The Commission will use the applicable
provisions of the standards listed in Rule R6‑21 as criteria of accepted
good practice in testing meters.

(b) Positive Displacement Meters.

(1) Accuracy at Test Points.

FlowAdjusted
to within

Check flow
98.5%-100.5%

Not less than full

rated flow
98.5%‑100.5%

(2) Overall Accuracy. - The accuracy at check
flow and the accuracy at not less than open rated flow shall agree within one
percent.

(c) Orifice Meters. - Accuracy at test points must be
within 1/2%, plus or minus.

(d) Timing Devices. - All recording type meters or
associated instruments which have a timing element that serves to record the
time at which the measurement occurs must be adjusted so that the timing
element is not in error by more than plus or minus 4 minutes in 24 hours.

(e) General.

(1) All meters and/or associated metering
devices, when tested, shall be adjusted as closely as practicable to the
condition of zero error.

(2) All tolerances are to be interpreted as
maximum permissible variations from the condition of zero error. In making
adjustments no advantages of the prescribed tolerance limits shall be taken.

R6‑27 FACILITIES AND EQUIPMENT FOR METER
TESTING

(a) Each utility shall maintain or designate a meter shop
for the purpose of inspecting, testing and repairing meters. The shop shall be
open for inspection by authorized representatives of the Commission or the
Public Staff at all reasonable times, and the facilities and equipment, as well
as the methods of measurements and testing employed, shall be subject to the
approval of the Commission.

(b) The area within the meter shop used for the testing of
meters shall be designed so that the meters and meter testing equipment are
protected from drafts and excessive changes of temperature.

(1) The calorimetric equipment shall be
installed in a suitably located testing station acceptable to the Commission
and subject to inspection by the Commission Staff or the Public Staff.

(c) The meters to be tested shall be stored in such manner
that the temperature of the meters is substantially the same as the temperature
of the prover.

(d) Working Standards. - Each utility shall own and
maintain, or have access to, at least one 5 cubic‑foot bell prover of an
approved type, and all other equipment necessary to test meters, which shall be
installed in the meter room.

(1) Means shall be provided to maintain the
temperature of the liquid in the meter prover at substantially the same level
as the ambient temperature in the prover room.

(2) The meter prover shall be maintained in
good condition and correct adjustment so that it shall be capable of
determining the accuracy of any service meter to within one‑half of one
percent.

(e) Each utility having meters which are too large for
testing on a 5‑cubic‑foot bell prover shall use a properly
calibrated test meter or a properly designed flow prover for testing the large
meters.

(f) Working standards must be checked periodically (see
Rule R6‑25(5)) by comparison with a secondary standard.

(1) Bell provers must be checked with a cubic
foot bottle which has been calibrated by the National Bureau of Standards.

(2) Rotary displacement test meters must be
checked with a bell prover of adequate capacity which has been calibrated by
representatives of the National Bureau of Standards.

(g) Extreme care must be exercised in the use and handling
of standards to assure that their accuracy is not disturbed.

(h) Each standard shall be accompanied at all times by a
certificate of calibration card, duly signed and dated, on which are recorded
the corrections required to compensate for errors found at the customary test
points at the time of the last previous test.

(i) Each utility must have properly calibrated orifices, as
may be necessary, to achieve the rates of flow required to test the meters on
its system.

(NCUC Docket No. M‑100, Sub 75, 10/27/77.)

R6‑28 RECORDS OF METERS AND ASSOCIATED METERING
DEVICES

Each utility shall maintain records of the following data,
where applicable, for each meter and/or associated metering device until
retirement:

(2) The dates of installation and removal from
service, together with the location.

R6‑29 METER TEST RECORDS

Each utility shall maintain records of at least the last two
tests made of any meter. The record of the meter test made at the time of the
meter's retirement shall be maintained for a minimum of 3 years. Test records
shall include the following:

(1) The date and reason for the test.

(2) The reading of the meter before making any
test.

(3) The accuracy "as found" at check
and open rated flow.

(4) The accuracy "as left" at check
and open rated flow.

(5) In the event test of the meter is made by
using a test meter or a flow prover, the utility shall retain all data taken at
the time of the test in sufficiently complete form to permit the convenient
checking of the test methods and the calculations.

R6‑30 PURITY REQUIREMENTS

All gas supplied to customers shall be substantially free of
impurities which may cause corrosion of mains or piping, or form corrosive or
harmful fumes when burned in a properly designed and adjusted burner.

R6‑31. Repealed by NCUC Docket No. G‑100,
Sub 34, 10/5/77.

R6‑32 PRESSURE SURVEYS AND RECORDS

(a) Each utility shall make a sufficient number of pressure
measurements on its mains and at the customer's meter so that it will have a
substantially accurate knowledge of the pressures in the low, intermediate and
high pressure systems in each district, division, or community served by its
distribution mains.

(b) All pressure records obtained under this rule shall be
retained by the utility for at least 2 years and shall be available for
inspection by the Commission's representatives. Notations on each record shall
indicate the following:

(1) The location where the pressure check was
made.

(2) The time and date of the check.

R6‑33 STANDARDS FOR PRESSURE MEASUREMENTS

(a) Secondary Standards. - Each utility shall own or have
access to a dead weight tester. This instrument must be maintained in an
accurate condition.

(b) Working Standards. - Each utility must have water
manometers, mercury manometers, laboratory quality indicating pressure gauges
and field type dead weight pressure gauges as necessary for the proper testing
of the indicating and recording pressure gauges used in determining the
pressure on the utility's system.

(c) Periodic Checks. - Working standards must be checked
periodically (see Rule R6‑25(5)) by comparison with a secondary standard.

(d) Handling of Standards. - Extreme care must be exercised
in the handling of standards to assure that their accuracy is not disturbed.

(e) Certificates or Calibration Cards. - Each standard
shall be accompanied at all times by a certificate or calibration card, duly
signed, and dated, on which are recorded the corrections required to compensate
for errors found at the customary test points at the time of the last previous
test.

R6‑34 HEATING VALUE

(a) Manufactured and Mixed Gas. - The heating value of
manufactured gas and mixed gas, including LP Gas mixed with air, shall be
considered as being under the control of the utility, except that natural gas
when mixed with manufactured or LP Gas for peak shaving or emergency purposes
shall not be considered a mixed gas.

(1) The average heating value on any one day
shall not exceed or fall below the standard total heating value (see Rule R6‑5(1)(a))
by more than five percent.

(2) The monthly average heating value shall be
not less than the standard total heating value.

(b) Natural and LP Gas. - The heating value of natural gas
and undiluted, commercially pure LP Gas shall be considered as being not under
the control of the utility.

(c) When Appliances to Be Readjusted. - The utility shall
determine the allowable range of monthly average heating values within which
its customers' appliances may be expected to function properly without repeated
readjustment of the burners. If the monthly average heating value is above or
below the limits of the allowable range for two successive months, the
customers' appliances must be readjusted in accordance with Rule R6‑18.

R6‑35 HEATING VALUE DETERMINATION AND RECORDS

(a) The utility may not be required to determine the
heating value of the gas sold if its gas supply is purchased from pipeline
companies which determine the heating value in a manner acceptable to the
Commission; however, if the utility sells any of its gas on a BTU basis, it
shall determine the heating value and install a calorimeter in the manner
provided in Subsection (b)(1), (2), (3) of this rule.

(b) The utility, if required to determine heating value
under subsection (a) of this rule, shall provide and maintain a calorimeter of
a type acceptable to the Commission for the regular determination of the
heating value of the gas sold.

(1) The calorimetric equipment shall be
installed in a suitably located testing station acceptable to the Commission and
subject to its inspection.

(2) The accuracy of all calorimeters, as well
as the method of making heating value tests, shall be acceptable to the
Commission. Recording calorimeters shall be tested with a standard gas at least
once each month.

(3) Heating value test records shall be
preserved for at least 3 years.

R6‑36 INTERRUPTIONS OF SERVICE

(a) Each utility, except where interruptions are permitted
by tariff or contract, shall make reasonable efforts to avoid interruptions of
service; but when interruptions occur, service shall be reestablished within
the shortest time practicable, consistent with safety.

(b) Each utility shall keep records of interruptions of
service on its system and shall make an analysis of the records for the purpose
of determining steps to be taken to prevent recurrence of such interruptions.
Such records should include the following concerning the interruptions:

(1) Cause.

(2) Date and time.

(3) Duration.

(4) Location affected.

(5) Number of customers affected.

(c) Each utility shall notify the Commission by telephone
or facsimile of any interruption of service to a major portion of its system.

(d) A detailed, written report on each interruption of
service shall be filed within 30 days following the notice required in (c)
above.

(e) Planned interruptions shall be made at a time that will
not cause unreasonable inconvenience to customers and shall be preceded by
adequate notice to those who will be affected.

As criteria of accepted good safety practice, the Commission
will use the applicable provisions of the standards listed in Rule R6‑21.

R6‑38 PROTECTIVE MEASURES

(a) Each utility shall exercise reasonable care to reduce
the hazards to which its employees, its customers, and the general public may
be subjected.

(b) The utility shall give reasonable assistance to the
Commission in the investigation of the cause of accidents and in the
determination of suitable means of preventing accidents.

(c) Each utility shall maintain a summary of all reportable
accidents arising from its operations.

R6‑39 SAFETY PROGRAM

(a) Each utility shall adopt and execute a safety program,
fitted to the size and type of its operations. As a minimum, the safety program
should:

(1) Require employees to use suitable tools and
equipment in order that they may perform their work in a safe manner.

(2) Instruct employees in safe methods of
performing their work.

(3) Instruct employees who, in the course of
their work, are subject to the hazard of electrical shock, asphyxiation or
drowning, in accepted methods of artificial respiration.

(b) The minimum federal safety standards and the corrosion
control standards pertaining to gas pipeline safety and the transportation of
natural gas as adopted in 49 CFR, Part 192 and 49 CFR, Part 192 Subpart I, as
are in effect on November 15, 1971, and amendments thereto, are adopted and
shall be applicable to all natural gas facilities under the jurisdiction of the
Commission, except as to those requirements of North Carolina law which exceed
or are more stringent than the standards set forth in the above-mentioned
federal enactment, and further with the exception of any subsequent
modification or amendment to the North Carolina safety standards.

(c) The Federal Safety Standards pertaining to liquefied
natural gas facilities, as adopted in 49 CFR, Part 193, and as were in effect
on July 15, 1980, and all subsequent amendments thereto, are adopted and shall
be applicable to all liquefied natural gas facilities under the jurisdiction of
the Commission.

(d) Control of Drug Use. - The Federal Safety Standards
pertaining to the control of drug use in natural gas, liquefied natural gas,
and hazardous liquid pipeline operations as adopted in 49 CFR, Part 199, and as
were in effect on September 19, 1989, and all subsequent amendments thereto,
are adopted and shall be applicable to all facilities under the jurisdiction of
the Commission.

(e) The Federal Safety Standards pertaining to Grants for
State Pipeline Safety Programs; State Adoption of One Call Damage Prevention
Program as adopted in 49 CFR, Part 198, and as was in effect on September 20,
1990, and all subsequent amendments thereto, are adopted and shall be
applicable to all natural gas facilities under the jurisdiction of the
Commission.

Each customer's piping system shall be tested for leaks
before service is turned on.

(1) Pressure Test. - If local authorities do
not require the pressure test of customer's piping, as set forth in section
2.12, "Test of Piping for Tightness," NFPA Standard No. 54, the
utility shall advise the customer of the desirability of having his plumber
conduct such a test.

(2) Leakage Test. - Before turning on a gas
meter at any location, the piping system supplied shall be tested for leaks by
a method at least equal to that described in section 2.13, "Leakage Check
after Gas Turn‑On," in the latest edition of the American Standard
Installation of Gas Appliances and Gas Piping in Buildings, ASA Z21.30.

(NCUC Docket No. M‑100, Sub 75, 10/27/77.)

R6‑41 GAS LEAKS AND ANNUAL REPORTS

(a) A report of a gas leak shall be considered as an
emergency requiring immediate attention.

(b) The reporting rules and requirements regarding
transportation of natural gas and other gas by pipeline as adopted in 49 CFR
Part 191 in effect on June 4, 1984, and any subsequent amendments thereto, are
adopted with the following modifications:

(1) Section 191.3(1)(ii) - Change
"$50,000" to "$5,000"

(2) Section 191.9(c) - Delete

(3) Section 191.11(b)(2) - Delete

(c) This rule shall be applicable to all natural gas
operators subject to the jurisdiction of the Commission pursuant to G.S. 62‑50.

(d) All natural gas operators shall submit two (2) copies
of each report called for in Part 191 of Title 49, Code of Federal Regulations,
to the Commission. The Chief of the Gas Pipeline Safety Division of the
Commission is hereby authorized to transmit one (1) copy of each such required
report to the U.S. Department of Transportation, Materials Transportation
Bureau, Office of Operation and Enforcement.

No natural gas utility shall construct or operate natural
gas facilities in territory occupied by and receiving similar service from
another natural gas utility except upon written notice to the Commission and to
the company occupying and serving the territory, opportunity for public
hearing, and written approval by the Commission. Territory which has been
assigned to a natural gas utility by the Commission shall be presumed occupied
by it and receiving similar service from it, subject to a finding by the Commission
that the authorized natural gas utility has waived or disclaimed its right to
serve, or that it is not feasible for the authorized company to serve, or that
service by the authorized company would be less feasible than for the
applicant, or that existing service by the authorized company is inadequate or
inferior and that the authorized company reasonably will not or cannot render
adequate service or that the natural gas utility has forfeited its exclusive
franchise rights pursuant to a finding and order of the Commission issued under
Rule R6-63.

No natural gas utility under the jurisdiction of the
Commission shall construct or operate a natural gas pipeline facility outside
its designated territory to which the utility has exclusive franchise rights or
to be connected to an interstate pipeline, including looping of present
facilities, from an interstate supplier without having first applied in writing
to, and obtained the written approval of the Commission. Such application shall
clearly show that the construction proposed is economically and financially
feasible, and will not be wastefully duplicative of existing or proposed
construction by any other supplier of natural gas in the State, will not
constitute an unfair burden upon applicant's customers in the State, and is in
the public interest generally.

If the proposed pipeline facility is within a company's
designated territory to which the company has exclusive franchise rights and is
to a community for initial service, the natural gas utility shall notify the
Commission in writing before entering upon construction or operation of the
facility.

Where a natural gas pipeline constructed, owned, or operated
by a natural gas utility subject to jurisdiction of the Commission traverses
territory or area designated by the Commission as the authorized territory or
service area to which another natural gas utility regulated by the Commission
has exclusive franchise rights, and either of said companies finds it necessary
or desirable to furnish natural gas for domestic, commercial, industrial, or
farm use within an area adjacent to said pipeline and within the boundaries of
the territory traversed by the pipeline, the owner of the pipeline shall
install the meters, regulators, and taps necessary to furnish the service and
shall deliver the natural gas to the company in whose territory or area the
pipeline is located at rates and under regulations from time to time filed with
and approved by the Commission, and the gas utility having authority to serve
in the designated area shall have opportunity to sell and to service said
domestic, commercial, industrial, or farm customers.

(a) Purpose. - The purpose of this Rule is to implement the
portion of G.S. 62-36A(b) which provides for expansion of service by each
franchised natural gas local distribution company to all areas of its franchise
territory within three years, and which further provides that any local
distribution company that the Commission determines is not providing adequate
service to at least some portion of each county within its franchise territory
by July 1, 1998 or within three years of the time the franchise territory is
awarded, whichever is later, shall forfeit its exclusive franchise rights to
that portion of its territory not being served.

(b) Forfeiture For Failure To Provide Service. - Each
natural gas utility shall provide for the expansion of natural gas service to
at least some portion of each county within its certificated service territory,
as established by the Commission, on or before the following date:

(i) July 1, 1998 for certificated service
territories existing on July 1, 1995, or

(ii) three years after the date a certificate
of public convenience and necessity is awarded for newly certificated service
territories, or the natural gas utility shall be subject to forfeiture of its
exclusive franchise rights to each such unserved county located within its
service territory upon a finding by the Commission that the natural gas utility
is not providing adequate service to at least some portion of that county on
the applicable date set forth above.

(c) Review Proceedings. - The Commission will initiate a
review proceeding for each natural gas utility subject to its jurisdiction
following the applicable date set forth in subsection (b)(i) or (b)(ii) above
to determine whether the utility is providing adequate service to at least some
portion of each county within its franchise territory. The Commission will
require the utility to file testimony, and the testimony shall include the
following:

(i) A list of counties in the certificated
service territory in which the natural gas utility has no transmission
facilities or distribution system in service on such date;

(ii) A description of any immediate plans the
natural gas utility has to serve a portion of any of the unserved counties
listed;

(iii) A description of right-of-way acquisition,
natural gas system design work being undertaken, or natural gas system
construction work in progress by the natural gas utility on such date in any of
the unserved counties listed;

(iv) Citation by case caption and docket number
of any pending application before the Commission for the use of expansion funds
for the construction of natural gas facilities in any of the listed unserved
counties and a description of the current status of any such expansion fund
project to the extent a Commission order approving the project has been issued;
and

(v) Any other information the natural gas
utility may wish the Commission to consider relating to its efforts to provide
service to the unserved counties listed.

The Commission will allow for interventions by interested
persons and will allow all intervenors to participate fully in the review
proceedings. The Commission will allow the Public Staff and other intervenors
to file testimony, in which they may propose that counties other than those
listed by the utility be considered for forfeiture and provide support for
their proposal. The Commission will schedule a hearing and will provide for
public notice thereof to be given throughout the franchise territory of the
utility. Following the hearing, the Commission shall issue an order in which it
will determine whether the natural gas utility is providing adequate service to
at least some portion of each county within its franchise territory and if the
Commission finds that the utility is not providing adequate service to at least
some portion of any such county, the Commission will order that the natural gas
utility forfeit its exclusive franchise rights to each such county.

(d) Adequate Service. - The Commission will determine
whether adequate service is being provided to at least some portion of each
county in a natural gas utility's franchise territory based on the review
proceedings provided in subsection (c) above. The requirement that adequate
service must be provided by the applicable date set forth in subsection (b)(i)
or (ii) above may be deemed to have been met for a given county even though the
natural gas utility has not actually begun providing service if the following
conditions are met:

(i) the natural gas utility has completed a
substantial amount of design process/service for the construction of natural
gas facilities into at least some portion of the county, such as the
preparation of engineering design for pipe size and capacity parameter,
rectifier facilities, route location, materials specifications, construction
specifications and drawings by an engineer sufficient to indicate the
facilities to be built; or

(ii) the natural gas utility has begun to
acquire rights-of-way for the construction and operation of natural gas
facilities in the county; or

(iii) by at least six months before the
applicable date set forth in subsection (b)(i) or (ii) above, the natural gas
utility filed an application that complies with the Commission's applicable
orders and rules for use of expansion funds for the construction of facilities into
at least some portion of the county; and

(iv) it appears likely that the construction of
the facilities will be completed and service will be provided within two years
of the applicable date set forth in subsection (b)(i) or (ii) above.

If the natural gas utility meets the above conditions, it
will be given two years from the applicable date set forth in subsection (b)(i)
or (ii) above to complete construction of its proposed project and begin
providing service. If construction of the facilities included in the proposed
project are not substantially completed at the end of the two-year period, the
Commission shall issue an order requiring the utility to show cause why the
Commission should not find that the requirements of G.S. 62-36A(b) and of this
Rule have not been met and why the Commission should not issue an order
declaring the natural gas utility to have forfeited its exclusive franchise
rights to such county in which the proposed facilities are not completed and in
service.

(NCUC Docket No. G-100, Sub 70, 3/19/96.)

R6‑64 to R6‑69. Reserved

04 NCAC 11 R06-70. Uniform system of accounts.

For utilities with annual accounting and reporting periods
based on the calendar year, effective January 1, 2002, and for utilities with
fiscal year accounting and reporting periods, effective with fiscal years
beginning in 2002, the Uniform System of Accounts Prescribed for Natural Gas
Companies Subject to the Provisions of the Natural Gas Act, as currently
embodied in the United States Code of Federal Regulations, Title 18, Part 201,
and as revised periodically, is hereby adopted by this Commission as its
accounting rules for natural gas utilities and is prescribed for the use of all
natural gas utilities under the jurisdiction of the North Carolina Utilities
Commission, subject to the following exceptions and conditions unless otherwise
ordered by the Commission:

(1) All orders and practices of the Commission
in effect as of the effective date of this Rule with any accounting impacts
that conflict with provisions of the Uniform System of Accounts shall remain in
effect, and future such orders and practices with such impacts shall supersede
the provisions of the Uniform System of Accounts for North Carolina retail
jurisdictional purposes.

(2) All references to federal statutes, federal
regulations, and other federal documents are to be ignored or deleted where
they are not applicable to the jurisdiction exercised by this Commission.

Each natural gas utility shall make a depreciation study at
least once every five years. All such studies, including any proposed changes
in depreciation rates, shall be submitted to the Commission for approval.

(a) Purpose. The purpose of these rules is to implement
G.S. 62-158 and G.S. 62-2(9) by providing for the establishment, funding,
operation and administration of natural gas expansion funds to promote the
public welfare throughout the State. Any such fund is to be used by the
franchised natural gas local distribution company for which it is approved for
the construction of facilities in its franchised territory to extend natural
gas service to areas of the State where natural gas service is not available.

(3) Net present value: The present value of
expected future net cash inflows over the useful life of a Project minus the
present value of net cash outflows.

(4) Project: The scope of the construction of
facilities to extend service into unserved areas.

(5) Unserved areas: Counties, cities or towns
of which a high percentage is unserved.

(NCUC Docket No. G-100, Sub 57, 4/9/92.)

R6-82 ESTABLISHMENT OF EXPANSION FUNDS

(a) Upon petition by an LDC, the Commission may, after a
hearing, order the establishment of a special Natural Gas Expansion Fund (Fund)
to be used by the petitioning LDC to construct facilities into unserved areas
in that LDC's franchised territory that otherwise would be economically
infeasible.

(b) Any petition for the establishment of a Fund shall
include a showing that there are unserved areas in the LDC's franchised
territory and that expansion of natural gas facilities to such areas is
economically infeasible. In its petition for the establishment of a Fund, an
LDC shall request the Commission to authorize appropriate funding and show the
following:

(1) If approval for the application of supplier
refunds to the Fund is sought, the amount of the refunds the LDC has received
or which it expects to receive and when it expects to receive them, to the
extent then known or reasonably capable of estimation.

(2) If an expansion surcharge is requested, the
amount which the LDC estimates the requested surcharge will generate over
periods of one year and three years.

(c) The Commission shall order the petitioning LDC to
publish a notice of the petition and the request for funding in a form approved
by the Commission. If an expansion surcharge or application of supplier refunds
is requested, the Commission shall require the petitioning LDC to mail an
approved notice to each of its customers.

(d) In determining the establishment of a fund and the
sources and magnitude of the initial funding, the Commission will consider the
LDC's showing that expanding to serve unserved areas is economically infeasible
and such other factors as the Commission deems reasonable and consistent with
the intent of G.S. 62-158 and G.S. 62-2(9). Before ordering the establishment
of a fund, the Commission must find that it is in the public interest to do so.
Upon the establishment of a fund, the Commission shall provide for appropriate
notice of its decision.

(NCUC Docket No. G-100, Sub 57, 4/9/92.)

R6-83 STRUCTURE AND ADMINISTRATION OF EXPANSION FUNDS

(a) Upon the establishment of a fund for a petitioning LDC,
a special fund in an interest-bearing account shall be created in the office of
the State Treasurer to be funded as provided in G.S. 62-158. Any interest or
other income derived from the fund shall be credited to the Fund.

(b) After public notice and hearing as provided in Rule
R6-82, the Commission may, for an LDC for which a Fund is being or has been
established,

(1) order that refunds from the LDC's suppliers
of natural gas and transportation services be placed in the Fund;

(2) approve an expansion surcharge in
accordance with G.S. 62-158(b) to be charged, by separate line item on bills,
to all customers purchasing natural gas or transportation service throughout
that LDC's franchised territory for service rendered after approval, such
surcharge to remain in effect until further order of the Commission, and order
the LDC to deposit proceeds collected from such surcharge in the Fund; or

(3) approve other sources of funding proposed
by the LDC in its petition.

(c) Monies received from approved sources of funding shall
be remitted to the Commission, as follows:

(1) Refunds ordered to be placed in the LDC's
Fund shall be remitted plus interest to the Commission within ten (10) days of
the Commission's order or upon receipt of such refunds.

(2) Expansion surcharges billed shall be
recorded on the books of the LDC in a separate accounts-payable account by
customer class prior to their transfer to the Commission. The balance in this
account shall be remitted to the Commission by the 20th day of the month
following the month in which the surcharges are billed. If surcharges billed
are uncollected, such uncollected amount shall be treated as natural gas bad
debt losses for ratemaking purposes. To the extent the LDC negotiates a price
lower than the tariff rate, any discount will be applied first to the expansion
fund surcharge. The amount of the surcharge forfeited due to negotiations shall
not be recoverable from the LDC nor shall it be considered a "negotiated
loss" for the purpose of the LDC's deferred account.

(3) Other sources of funding shall be remitted
as ordered by the Commission when such sources are approved and when the funds
become available to the LDC.

(d) The refunds ordered to be placed in an LDC's Fund,
surcharges collected by each LDC pursuant to G.S. 62-158, and any other
approved funding shall be deposited in the fund established for that LDC.

(e) The LDC may, at any time, based upon changes in
circumstances, request changes in the nature or magnitude of the funding
previously approved. If the Commission finds that the request involves a
material change in funding, the Commission shall provide for appropriate notice
and shall afford an opportunity for review and comment by interested parties.
The Commission shall set the request for hearing if it deems it appropriate.

(f) Upon petition for the dissolution of a Fund, the
Commission shall consider the status of service in the affected LDC's
territory, the feasibility of further expansion and other relevant factors
consistent with the intent of G.S. 62-158 and G.S. 62-2(9). Upon dissolution,
the affected LDC shall file a final accounting for the Fund. Any monies
remaining in the Fund at the time of dissolution shall be refunded to the rate
classes that contributed them pursuant to Commission order.

(NCUC Docket No. G-100, Sub 57, 4/9/92.)

R6-84 APPROVAL OF EXPANSION PROJECTS

(a) Each LDC that has an established Fund shall, on at
least an annual basis, file a request for approval of any Project(s) which
previously have not been approved and which it proposes to undertake within the
next year and for which it proposes to use expansion funds. The request shall
include an analysis of each proposed Project. For each proposed Project, the
LDC's analysis shall contain the following:

(1) A precise geographic description, a map, a
detailed description of the physical facilities, including their projected
operating parameters, and the arrangements that have been or are proposed to be
made to obtain right-of-ways;

(2) The date when construction is proposed to
begin and end, specific construction budgets and a timetable for disbursements
from the Fund; and

(3) A net present value analysis calculated in
a generally accepted manner. The net present value calculation shall reflect
only the income tax benefits to be realized by the LDC.

(b) The request shall also include a prioritizing of the
proposed Projects by the LDC to the extent practicable based upon the degree of
feasibility; the existence of an active demand and previous requests for
service; the extent of contributions from local governments, potential end
users, or others; benefits to the LDC's transmission or distribution system;
the improvement in the feasibility of subsequent extensions into relatively
densely populated counties or towns resulting from an initial Project, if
applicable; and any other relevant factors.

(c) The Commission shall provide for notice of each request
for approval filed under this Rule and shall afford an opportunity for review
and comment by interested parties. The Commission shall set the request for
hearing if it deems it appropriate.

(d) The Commission shall enter an order approving or
denying funding on a project-specific basis. The order shall include a finding
of the negative net present value of each Project approved, which shall be the
maximum amount to be disbursed from the Fund for that Project. In determining
the Projects to be approved for each annual period, the Commission shall
consider the balance in the fund at the time of the approval, the relative
merit of each Project based on customer need, the degree of economic
feasibility, and such other factors as the Commission deems pertinent and
consistent with the intent of G.S. 62-158 and G.S. 62-2(9). To the extent the
Commission's order approving a Project is based on different assumptions,
including design, projected load or amount or sources of funding, than those
used by the LDC in its request for approval, the LDC shall have the right not
to proceed with the Project or to invest its funds in the same, and no use may
be made of expansion funds on such Project absent further order of the
Commission.

(e) The LDC may, at any time, based upon changes in
circumstances, propose modifications with respect to Projects previously
approved by the Commission. If the Commission finds such a proposal to
constitute a material change in an approved Project, the Commission shall
provide for appropriate notice and shall afford an opportunity for review and
comment by interested parties. The Commission shall set the proposal for
hearing if it deems it appropriate.

(f) If construction on an approved Project has not begun
within one year of the order granting approval, the Commission may require the
LDC to show cause why the balance in its Fund allocated to such Project should
not be allocated to other approved Projects or otherwise disposed of as ordered
by the Commission.

(NCUC Docket No. G-100, Sub 57, 4/9/92.)

R6-85 DISBURSEMENTS

(a) Monies from a fund shall be disbursed to the LDC for
which the fund was established only as ordered by the Commission. All
disbursements shall be used only for the specific Projects for which they were
approved. The LDC shall not be required to commence or continue construction of
any Project if it appears that the funds available in its Fund will be
inadequate to complete construction.

(b) Progress Payments. - Disbursements shall be in the form
of reimbursements for actual amounts paid by the LDC. The LDC shall submit a
Request for Reimbursement for each approved Project not more often than once a
month. Such Requests shall specify the work performed and materials and
equipment delivered to the Project during the period covered by the request for
reimbursement and be accompanied by the Project Status Report and the Summary
of Construction Cost Reimbursement Report described in Rule R6-87. Requests
shall also contain a certification that the amounts sought by the LDC have been
paid for work completed on and materials provided to the Project. If the
request for disbursement complies with these rules and the Commission's order
approving the Project for which reimbursement is sought, the request for
disbursement shall not be subject to any further proceedings or orders and
shall be paid within fifteen (15) days of receipt. If the request raises issues
of material fact as to whether such a disbursement is appropriate, the
Commission may set the matter for hearing or otherwise resolve any issues as to
the appropriateness of the disbursement. The maximum amount of each
reimbursement shall be 75% of total expenditures during the period covered by
the request. Cumulative reimbursements for the Project shall not exceed the
approved negative net present value.

(c) Final Accounting. - Within three years from the date of
the Commission's order approving a Project, a final accounting shall be filed
showing the actual expenditures to date, disbursements to date, the negative
net present value determined by the Commission for the Project, and the balance
of funds requested to be disbursed, if any. This information shall be provided
in the formats approved by the Commission. Unless the Commission specifically
orders otherwise, disbursements for a Project will not be approved after the
date the final accounting is approved by the Commission. If the total amount of
the approved negative net present value has not been disbursed by the time the
final accounting is approved, the Commission shall, upon motion of the LDC and
notice to all parties, approve a further disbursement up to the lesser of the
approved negative net present value or the actual expenditures to date.

NCUC Docket No. G-100, Sub 57, 4/9/92.)

R6-86 BUY BACK

In determining whether or not a buy back of a Project shall
be allowed or required, the Commission shall consider: (1) whether the Project
in question has become economically feasible and the facilities used and useful
as required by G.S. 62-133(b)(1); (2) the impact on the LDC's customers; (3)
whether the LDC has or can obtain on reasonable terms the necessary funds; and
(4) any other factors relevant to a determination of whether the buy back is in
the public interest. No buy back shall be approved unless the records required
to be kept by these rules are provided. No buy back will be required unless the
LDC has, or can obtain on reasonable terms, funds for remittance on a project
financing basis.

(NCUC Docket No. G-100, Sub 57, 4/9/92.)

R6-87 REPORTING

(a) A Surcharge Deposit Report shall be filed by an LDC
with an approved surcharge on a monthly basis concurrent with each deposit into
the Fund. This report shall include, by rate schedule, the information required
by the Commission in the format approved by the Commission.

(b) Whenever an LDC with an established Fund seeks to
deposit funds from sources other than surcharges, it shall file a Request to
Deposit Funds from Other Sources. This report shall contain a description of
the source of the funds, the total dollar amount, and the docket number at the
Federal Energy Regulatory Commission, if any.

(c) The Commission shall determine the status of each LDC's
Fund on a monthly basis and prepare a monthly Expansion Fund Financial
Statement for each LDC with an established Fund.

(d) Each LDC with an established Fund shall file reports
with each Request for Reimbursement or at least quarterly. These reports shall
be filed in the formats approved by the Commission, and these reports are as
follows:

(e) A comprehensive annual report on all activity in the
Fund for the fiscal year ending November 30 shall be filed by each LDC with an
established Fund by February 1 of each year and the report shall be in the
format approved by the Commission. (NCUC Docket No. G-100, Sub 57, 4/9/92.)

R6-88 ACCOUNTING AND RATEMAKING

(a) The gas plant accounts shall not include monies
disbursed from a Fund. Plant constructed from these monies shall be shown as a
reduction to gross plant constructed when assembling cost data in work orders
for posting to the plant ledger of accounts. Disbursements from a Fund shall be
credited to the accounts charged with the cost of such construction.

(b) Monies disbursed from a fund shall be credited first
against transmission main costs, secondly against distribution main costs, and
finally to other plant.

(c) No depreciation expense on the portion of the plant
cost financed by disbursements from the Fund shall be included in the LDC's
cost of service.

(d) Any remittance of monies in order to buy back
facilities constructed with monies disbursed from a Fund shall be considered by
the Commission only in the context of a general rate case. Any amounts remitted
shall be included in rate base in such general rate case. The Commission shall
order that any such remittance of monies either be deposited in the LDC's Fund
or be refunded to the customer rate classes that contributed the monies, and
the Commission may order interest in a reasonable amount to be determined by
the Commission.

(NCUC Docket No. G-100, Sub 57, 4/9/92.)

R6-89 DEFERRAL ACCOUNTING FOR NATURAL GAS EXPANSION

(a) An LDC may request Commission approval to create a
regulatory asset account for the purpose of accruing a return on its investment
in transmission lines constructed as part of a Project of the type that would
be eligible for use of an expansion fund pursuant to G.S. 62-158. Such a
request may be filed with the Commission as part of a request for approval of a
Project pursuant to Rule R6-84 but in no event less than 45 days prior to the
date the accrual is to begin. AFUDC will accrue during construction; however,
the accrual under this Rule shall begin no sooner than the date construction is
completed and continue until the date new rates become effective in the LDC's
next general rate case in which the investment in the Transmission Facilities
are included in the LDC's rate base. The Commission, however, may terminate the
accrual upon the motion of any interested party and after notice to the LDC and
opportunity for hearing. The accrual under this Rule for a particular project
shall not exceed five (5) years unless so authorized by the Commission upon a
showing by the LDC of good cause.

(b) For the purposes of this Rule, "Transmission
Facilities" shall include the gas pipeline and all appurtenant related
facilities, including land, mains, valves, meters, boosters, regulators,
compressors and their driving units and appurtenances, and other related
equipment constructed as part of the Project, the purpose of which is to
facilitate the transportation of natural gas from an interstate pipeline, other
portions of the LDC's system including existing transmission mains, or other
suppliers of gas for ultimate delivery to a distribution system(s).
Transmission Facilities shall end at the inlet side of the equipment which
meters or regulates the entry of gas into one or more distribution systems.

(c) In determining whether to approve a request under this
rule, the Commission will consider the desirability of providing gas service to
the new area covered by the Project, the size and relative infeasibility of the
Project for which deferral accounting is sought, the LDC's overall expansion
plans as reported pursuant to G.S. 62-36A, the LDC's currently earned return on
equity, the amount of the investment as a percentage of the LDC's rate base and
the amount of the anticipated accrual as a percentage of the LDC's revenues,
the estimated impact of the accrual on rates when the investment is included in
the LDC's rate base in a general rate case, and any other factors affecting the
public interest.

(d) The anticipated accrual under this Rule shall not
affect the calculation of the net present value of a Project for the purpose of
the use of an expansion fund pursuant to G.S. 62-158 and Rule R6-84. Approval
of the use of expansion funds as partial funding for a Project pursuant to G.S.
62-158 is not required for the Project to be eligible for Commission approval
of the deferral accounting treatment under this Rule.

(e) Upon receiving Commission approval, the LDC may, on a
monthly basis, debit the account in an amount equal to the LDC's currently
authorized overall rate of return on its investment in Transmission Facilities
constructed as part of Projects that have been completed but not included in
rate base.

(NCUC Docket No. G-100, Sub 68, 10/13/95.)

R6-90 APPLICATION PROCESS

(a) Purpose. The purpose of these Rules is to implement
G.S. 62-2(a)(9) and G.S. 62-159 by providing a process pursuant to which
funding from the proceeds of the general obligation natural gas bonds approved
by referendum in November 1998 can be made available to:

(i) existing North Carolina local distribution
companies (LDCs) or

(ii) a person awarded a new franchise or a
regional gas district for the construction of natural gas facilities in
unserved areas that would otherwise not be economically feasible to construct
(hereinafter collectively referred to as "eligible recipients" or
"applicants"). For purposes of these Rules, a "project" is
defined as all of the natural gas facilities, including but not limited to,
transmission and distribution lines, metering facilities, and compressors, and
all of the activities necessary to extend and provide natural gas service to an
unserved area that is eligible under the statutes for funding from the natural
gas bonds.

(b) Letters of intent. All applicants who intend to file
an application for approval to use natural gas bond funds shall first file a
letter of intent 30 days before the projected filing date of the application.
The letter shall give notice of the intention to file an application and shall
identify the counties involved in the project to be proposed. Upon the filing
of such a letter of intent, the Commission will promptly issue an order
establishing a filing deadline for competing letters of intent, i.e., letters
of intent as to applications that include one or more of the same counties.
Typically, this deadline will be 30 days from the date of the Commission's
order, and the order will be sent to those on the Commission's natural gas
service list, representatives of the counties involved, and all other known interested
persons. Upon expiration of the deadline for competing letters of intent, if
no competing letter of intent has been filed, the applicant shall file its
application for approval to use natural gas bond funds forthwith. If a
competing letter of intent is filed, the Commission will promptly issue an
order establishing a filing deadline for all applications that include one or
more of the same counties. Typically, this deadline will be 60 days from the
date of the Commission's order, but the Commission may establish some other
period as appropriate. Upon expiration of the deadline and upon the filing of
a competing application, the Commission shall consolidate the competing
applications as appropriate, set the applications for hearing, and establish a
procedural schedule.

(c) Projects involving a county or counties for which an
existing LDC has the exclusive franchise. For projects involving a county or
counties for which an existing LDC has the exclusive franchise, applications
for approval to use natural gas bond funds pursuant to G.S. 62-159 and this
Rule may be filed only by the existing LDC or by a regional gas district. An
application for approval to use bond funds shall contain the following
information:

(1) A precise geographic description, a map or
maps of the area(s) proposed to be served, a detailed description of the
proposed physical facilities, including their projected operating parameters
and characteristics, the arrangements that have been or are proposed to be made
to obtain rights-of-way and plans for obtaining capacity to supply the
projected demand;

(2) Details about any special permitting or
licensing that may be required, such as from the National Park Service, the
National Forest Service, the Federal Energy Regulatory Commission or the Army
Corp of Engineers, and a statement as to how much time the permitting or
licensing is likely to take;

(3) A market study, including an analysis of
potential customers and volumes, probable conversions from other fuels, and
projected growth resulting from population growth and economic development;

(4) An engineering study that includes the
proposed design of the system (including a pipe network flow analysis), routing
(including a review of planned or proposed state highway improvements), and
construction cost estimates;

(5) A net present value (NPV) analysis
conducted in a generally accepted manner that provides support for the amount
of natural gas bond funding requested in the eligible recipient's application;

(6) A demonstration of the applicant's
technical, operational, and financial management capabilities that will ensure
the successful and safe construction and operation of the project;

(7) A financing plan for the feasible part of
the project that includes the amounts, sources, and costs for common equity,
debt, and/or other types of financing;

(8) The estimated beginning and ending dates of
the proposed construction, including the date service to one or more customers
is proposed to begin, specific itemized construction budgets and a timetable
for disbursements from the bond fund; and

(9) A schedule or schedules of proposed rates.

(d) Projects involving a county or counties for which no
LDC has an exclusive franchise. For projects involving a county or counties
for which no LDC has an exclusive franchise, applications for approval to use
natural gas bond funds may be filed by any person, including an existing LDC,
that is a public utility or would become a public utility by constructing,
owning or operating the proposed natural gas facilities or by a regional gas
district. For projects involving such counties, a person, including an
existing LDC, that is a public utility or would become a public utility by
constructing, owning or operating the proposed natural gas facilities also must
file an application for a certificate of public convenience and necessity
pursuant to G.S. 62-110. All applications for approval to use natural gas bond
funds must include the information required by subsection (c) of this Rule.

(e) Accuracy required. In all cases, applications for
approval to use natural gas bond funds shall be as accurate as possible when
filed, particularly as to the estimates used in the NPV analysis of the
project. Amendments are discouraged. In cases of competing applications, the
Commission shall first give preliminary approval to use natural gas bond funds,
and the winning applicant shall then be required to refine the estimates and
move for final approval of the amount of bond money to be awarded. If
significant changes to the project or to the NPV analysis are made, the
Commission may in its discretion re-open the preliminary approval and conduct
such further proceedings as appropriate to reconsider the decision.

(f) Other applications. If not otherwise addressed in its
application, an applicant that is a public utility or would become subject to
regulation as a public utility if its application were granted, shall file for
approval of its proposed financing for the feasible portion of an approved
project to the extent required by G.S. 62-160 through G.S. 62-171 and
Commission Rule R1-16. A regional gas district proposing to use revenue bonds
to finance the feasible portion of a project for which bond funds have been
approved shall file for a certificate of convenience and necessity in
accordance with G.S. 159-95.

(NCUC Docket No. G-100, Sub 75, 03/08/99; 08/04/99.)

R6-91 APPROVAL OF PROJECTS AND USE OF NATURAL GAS
BOND FUNDS

(a) Eligible recipients applying for bond funds pursuant to
Commission Rule R6-90 shall publish a notice of the application at the
direction of and in a form approved by the Commission.

(b) The Commission shall consider the following in
determining whether to approve the use of bond funds: the scope of the
proposed project, including the number of unserved counties and the number of
anticipated customers by class that would be served; the total cost of the
proposed project; the extent to which the proposed project is feasible; and
other relevant factors affecting the public interest.

(c) The Commission shall enter an order approving or
denying the use of natural gas bond funds on a project-specific basis. Natural
gas bond funds shall be used only pursuant to an order of the Commission after
a public hearing. Such an order shall specifically find the negative NPV of
the approved project and shall limit the bond funding pursuant to G.S. 62-159
to that negative NPV.

(d) As soon as practicable after an order approving funding
of a project becomes final, the Commission shall notify the State Treasurer of
such approval and the amount of bond funding that has been approved.

(e) If construction has not begun on a project for which
bond funding has been approved within one year after the date on which the
order granting approval became final, the Commission shall require the
recipient to show cause why the approval should not be rescinded; why its franchise
should not be revoked, if appropriate; and why it should not be required to
reimburse bond monies paid to it, if any.

(NCUC Docket No. G-100, Sub 75, 03/08/99.)

R6-92 DISBURSEMENTS AND FINAL ACCOUNTING

(a) Monies from bond funds shall be disbursed only to an
eligible recipient awarded the right to use bond funds and only as ordered by
the Commission. All disbursements shall be used solely for the specific project
for which they were approved. A project for which bond funding has been
approved must be constructed as proposed unless the eligible recipient awarded
the bond funding petitions the Commission to make modifications to the project
and the Commission finds that the public interest requires that modifications
be made.

(b) Disbursements shall be in the form of reimbursements
for actual amounts paid by an eligible recipient awarded the right to use bond
funds for an approved project. Eligible recipients awarded the right to use
bond funds shall submit requests for reimbursement not more often than once a
month. Such requests shall specify the work performed on and the materials and
equipment delivered to the approved project during the period covered by the
request for reimbursement and shall be accompanied by the Project Status Report
described in Commission Rule R6-93. Requests also shall contain a
certification that the amounts sought by the eligible recipient awarded the
right to use bond funds have been paid for work completed on and materials and
equipment provided to the approved project. The maximum amount of each
reimbursement shall be 75% of total expenditures during the period covered by
the request. Cumulative reimbursements for an approved project shall never
exceed the approved negative NPV.

(c) If the request for disbursement complies with these
Rules and the Commission order approving the use of bond funds, the request
shall not be subject to any further proceedings or orders and shall be paid as
promptly as possible. If the request is not in compliance or if the request
raises issues of material fact as to whether such a disbursement is
appropriate, the Commission shall set the matter for hearing or otherwise
resolve any issues as to the appropriateness of the disbursement.

(d) Within three years from the date of a final Commission
order approving a project and use of bond funds, the recipient shall file a
final accounting showing the actual expenditures to date, disbursements to date,
the negative NPV determined by the Commission, and the balance of funds
requested to be disbursed, if any. This information shall be provided in
formats approved by the Commission. Unless the Commission specifically finds
that good cause has been shown, no disbursement will be approved after the
final accounting is approved by the Commission. If the total amount of the
approved negative NPV has not been disbursed by the time the final accounting
is approved, the Commission shall, upon motion byrecipient awarded the
right to use bond funds and notice to all parties, approve a further
disbursement up to the lesser of the approved negative NPV or the actual
expenditures to date.

(NCUC Docket No. G-100, Sub 75, 03/08/99.)

R6-93 REPORTS

(a) Each eligible recipient awarded the right to use bond
funds shall file a Project Status Report in the format approved by the
Commission for each approved project with each request for reimbursement, or at
least quarterly. This report shall contain four separate sections:

(1) budgeted versus actual cost data;

(2) construction cost summary;

(3) summary of construction cost reimbursements
already received; and

(4) current reimbursement requested. To the
extent extraordinary delays have occurred, a report on such delays and expected
progress shall be included in this report.

(b) Recipients of bond funds, if subject to the biennial
reporting requirement in G.S. 62-36A, shall provide customer and construction
cost information on projects for which use of bond funds has been approved in
their Biennial Expansion Reports filed every two years pursuant to G.S.
62-36A. Recipients not subject to the reporting requirement in G.S. 62-36A
shall provide customer and construction cost information on projects for which
use of bond funds has been approved every two years in a report filed at the
same time as the Biennial Expansion Reports, beginning with the first due date
of those reports following approval of the use of bond funds for a project.

(c) The Commission shall use the information provided by
subsection (b) of this Rule to determine whether an investigation is warranted
to determine if a project for which use of bond funds has been approved has
become economically feasible. If the Commission finds that a project has
become economically feasible, the Commission shall require the recipient of the
bond funds to remit to the Commission appropriate funds related to the approved
project, and the Commission may order those funds to be returned with interest
in a reasonable amount to be determined by the Commission and deposited with
the State Treasurer.

(d) If a regional gas district wishes to sell or otherwise
dispose of facilities financed with bond funds received pursuant to G.S.
62-159, it must first notify the Commission, which shall determine at that time
the method of repayment or accounting for those funds.

(e) The Commission shall provide quarterly reports on the
expenditure of moneys from the Natural Gas Bonds Fund to the Joint Legislative
Commission on Governmental Operations, the Chairs of the Senate and House of
Representatives Appropriations Committees, and the Fiscal Research Division of
the General Assembly.

(NCUC Docket No. G-100, Sub 75, 03/08/99.)

R6-94 ACCOUNTING AND RATEMAKING FOR REGULATED
RECIPIENTS

(a) The gas plant accounts for recipients of bond funds
regulated by the Commission shall be reduced by the amount of bond funds
utilized to construct such plant, except to the extent such funds have been
remitted by the company pursuant to order of the Commission.

(b) No depreciation expense on the portion of the plant
cost financed by disbursements of bond funds shall be included in the cost of
service of recipients regulated by the Commission, except to the extent such
funds have been remitted by the company pursuant to order of the Commission.

(NCUC Docket No. G-100, Sub 75, 03/08/99.)

ARTICLE 14

INCENTIVE PROGRAMS.

R6‑95 INCENTIVE PROGRAMS FOR NATURAL GAS UTILITIES

(a) Purpose. — The purpose of this rule is to establish
guidelines for the application of G.S. 62‑140(c) to natural gas
utilities that are consistent with the directives of that statute and
consistent with the public policy of this State set forth in G.S. 62‑2.

(b) Definitions. — As used in this rule, the following
definitions shall apply:

(1) “Consideration” means anything of economic
value paid, given or offered to any person by a natural gas utility (regardless
of the source of the “consideration’’) including, but not limited to: payments
to manufacturers, builders, equipment dealers, contractors including HVAC
contractors, electricians, plumbers, engineers, architects, and/or homeowners
or owners of multiple housing units or commercial establishments; cash rebates
or discounts on equipment/appliance sales, leases, or service installation;
equipment/appliances sold below fair market value or below their cost to the
natural gas utility; low interest loans, defined as loans at an interest rate
lower than that available to the person to whom the proceeds of the loan are
made available; studies on energy usage; model homes; and payment of trade show
or advertising costs. Excepted from the definition of “consideration” are
favors and promotional activities that are de minimis and nominal in value and
that are not directed at influencing fuel choice decisions for specific
applications or locations.

(4) “Natural gas utility” means, for purposes
of this rule, a person, whether organized under the laws of this State or under
the laws of any other state or country, that owns or operates in the State
equipment or facilities for producing, transporting, distributing, or
furnishing piped gas to or for the public for consumption.

(c) Filing for Approval.

(1) Application of Rule. — Prior to a natural
gas utility implementing any Program, the purpose or effect of which is to
directly or indirectly alter or influence the decision to use the natural gas
utility’s service for a particular end-use or to directly or indirectly
encourage the installation of equipment that uses the natural gas utility’s
service, the natural gas utility shall obtain Commission approval.

Whether a Program is offered at the
expense of the natural gas utility’s shareholders, ratepayers or a third party
shall not affect the filing requirements under this rule.

A natural gas utility shall file for
approval all Programs to offer Consideration which are administered, promoted
or funded by the natural gas utility’s subsidiaries, affiliates and/or
unregulated divisions or businesses where the natural gas utility has control
over the entity offering or is involved in the Program and an intent or effect
of the Program is to adopt, secure, or increase the use of the natural gas
utility’s utility services.

(2) Filing Requirements. — Each application for
the approval of a Program shall include the following:

(i) Cover Page. — The natural gas utility shall attach
to the front of an application a cover sheet generally describing the Program,
the Consideration to be offered, anticipated total cost of the Program, the
source and amount of funding proposed to be used, proposed classes of persons
to whom it will be offered, and the duration of the Program.

(ii) Description. — A detailed description of the
Program, its duration, purpose, estimated number of participants, and impact on
the natural gas utility’s general body of customers and the natural gas
utility.

(iii) Cost. — The estimated total and per unit cost for
the Program to the natural gas utility, reported by type of expenditure (e.g.,
direct payment, rebate, advertising) and the planned accounting treatment for
those costs. If the natural gas utility proposes to place any costs to be
incurred in a deferred account for possible future recovery from its customers,
it shall disclose the same and provide an estimate of each cost to be deferred.
The natural gas utility shall describe, in detail, all other sources of monies
to be used, including the name of the source, the amount provided, and the
reasons the third party is providing the money.

(iv) Effect on Customer Use. — A statement of the
effect, if any, that the Program is expected to have on customer use of the
natural gas utility’s service.

(v) Conditions of Program. — The type and amount of
Consideration and how and to whom it will be offered or paid, including
schedules listing the Consideration to be offered, a list of those who will use
the natural gas utility’s service, and other information on the availability
and limitations (who can and cannot participate) of the Consideration. The
natural gas utility shall describe any service limitations or conditions it
imposes on customers who do not participate in the Program.

(vi) Economic Justification. — Economic justification
for the Program, including the results of appropriate cost-effectiveness tests.

(vii) Communications. — Detailed cost information on the
amount the natural gas utility anticipates will be spent on communication
materials related to the Program. Such cost shall be included in the Commission’s
consideration of the total cost of the Program and whether the total cost of
the Program is reasonable in light of the benefits. To the extent available,
the natural gas utility shall include examples of all communication materials
to be used in conjunction with the Program.

(viii) Commission Guidelines Regarding Incentive Programs. —
The natural gas utility shall provide the information necessary to comply with
the Commission’s Revised Guidelines for Resolution of Issues Regarding
Incentive Programs issued by Commission Order on March 27, 1996, in Docket No.
M‑100, Sub 124, set out as an Appendix to Chapter 8 of these rules.

(ix) Other. — Any other information the natural gas
utility believes relevant to the application, including information on
competition faced by the natural gas utility.

(d) Procedure.

(1) Service and Response. — The natural gas
utility filing for approval of a Program shall serve a copy of its filing on
the electric utilities and electric membership corporations operating within
the filing natural gas utility’s certificated territory, the Public Staff, the
Attorney General and any other party that has notified the natural gas utility
in writing that it wishes to be served with copies of all such filings that
involve the provision of Consideration. Those served, and others learning of
the application, shall have thirty (30) days from the date of filing in which
to seek intervention pursuant to Rule R1‑19 or file a protest
pursuant to Rule R1‑6. The filing natural gas utility shall have the
opportunity to respond to such petitions or protests within ten (10) days of
their filing. If any party granted intervention requests a hearing or otherwise
raises a material issue of fact, the Commission may, in its discretion, set the
matter for hearing.

(2) Notice and Schedule. — If the application
is set for hearing, the Commission shall require such notice as it deems
appropriate and shall establish a procedural schedule for prefiled testimony
and rebuttal testimony after a discovery period of at least 45 days. Where
possible, the hearing shall be held within ninety (90) days from the
application filing date.

(e) Scope of Review. — In considering whether to approve in
whole or in part a Program or changes to an existing Program, the Commission
may consider any other information it determines to be relevant, including, but
not limited to, the following issues:

(1) Whether the Program unreasonably
discriminates among persons receiving or applying for the same kind and degree
of service;

(2) Evidence of consideration or compensation
paid by any competitor, regulated or unregulated, of the natural gas utility to
secure the installation or adoption of the use of such competitor’s services;

(3) Whether the Program promotes unfair or
destructive competition or is inconsistent with the public policy of this State
as set forth in G.S. 62‑2; and

(4) Whether the Program encourages energy
efficiency and its impact on the peak loads and load factors of the filing
natural gas utility.

(NCUC Docket No. E-100, Sub 113, 2/29/08.)

Article 15

Economic Development Infrastructure Cost Recovery

R6-96 Natural Gas Economic Development Infrastructure
Cost Recovery

(a) Purpose. – The purpose of this rule is to establish
guidelines for applications of an LDC seeking cost recovery for the
construction of natural gas development infrastructure under G.S. 62-133.15.

(b) Definitions. – As used in this section:

(1) "Commission" means the North Carolina
Utilities Commission.

(2) "Economic development infrastructure" is
the natural gas infrastructure placed in service to serve an eligible project.

(3) "Economically infeasible" refers to that
portion of investment in economic development infrastructure that has a negative
net present value.

(4) "Eligible economic development infrastructure
costs" are the economically infeasible portion of an economic development
infrastructure project investment.

(5) "Eligible project" means a project that
the Department of Commerce has designated as eligible under G.S. 143B-437.021.

(6) "LDC" means a natural gas local
distribution company.

(7) "Net cash inflows" are the expected
margin revenues, exclusive of gas costs recovered under G.S. 62-133.4,
generated from the provision of natural gas service to Eligible Projects.

(8) "Net cash outflows" are reasonable and
prudent economic development infrastructure costs. Such costs include, but are
not limited to, the following: (a) planning costs; (b) development costs; (c)
construction costs and an allowance for funds used during construction and a
return on investment once the project is completed, calculated using the pretax
overall rate of return approved by the Commission in the LDC's most recent
general rate case; (d) a revenue retention factor; (e) depreciation; and (f)
property taxes.

(10) "Rate adjustment surcharge (RAS)" is a
yearly surcharge that allows an LDC to charge a Commission approved rate to
recover the eligible economic development infrastructure costs.

(c) Application. – An application to recover eligible
economic development infrastructure costs under this section shall contain all
of the following information:

(1) Documentation showing the infrastructure is
designed to serve an eligible project.

(2) A precise geographic description, a map or maps of
the area proposed to be served, a detailed description of the proposed physical
facilities, including their projected operating parameters and characteristics,
and the arrangements that have been or are proposed to be made to obtain rights
of-way.

(3) Documentation of a binding commitment from the
prospective customer or the occupant of the eligible project to the LDC
regarding the need to take natural gas service for a period of at least 10
years from the date the gas is made available.

(4) A market study, including an analysis of any potential
customers and volumes, probable conversions from other fuels, and projected
growth and economic development resulting from the infrastructure.

(5) An engineering study that includes the proposed
design of the system (including a pipe network flow analysis), routing
(including a review of planned or proposed state highway improvements), and
construction cost estimates.

(6) An NPV analysis conducted in a generally accepted
manner that provides support for the eligible economic development
infrastructure costs.

(7) The estimated beginning and ending dates of the
proposed construction of the infrastructure, including the date service to the
eligible project is proposed to begin, and specific itemized construction
budgets.

(8) Proposed rates to be charged under the RAS
mechanism.

(d) Approval of Cost Recovery. – Once an eligible project
has been approved by the Department of Commerce, the LDC may file an
application with the Commission for authority to recover the estimated eligible
economic development infrastructure costs.

(1) The Commission shall provide for notice of each
request for approval filed under this Rule and shall afford an opportunity for
review and comment by interested parties. The Commission shall set the request
for hearing if it deems it appropriate.

(2) The Commission shall enter an order approving or
denying the eligible economic development infrastructure costs on a
project-specific basis. The order shall include a finding of the negative net
present value of economic development infrastructure costs for each eligible
project. The negative NPV is the maximum amount to be recovered through the RAS
for an eligible project.

(3) The LDC may request modifications to eligible
economic development infrastructure costs approved by the Commission. If the
Commission finds the requested change is material, the Commission shall provide
for appropriate notice and shall afford an opportunity for review and comment
by interested parties. The Commission shall set the proposal for hearing if it
deems it appropriate.

(e) Cost Recovery. – Once economic development
infrastructure is placed in service, the LDC may recover the economic
development infrastructure costs approved by the Commission in an annual RAS.
The RAS will terminate upon the earlier of the full recovery of the approved
economic development infrastructure costs, or the effective date of rates in
the LDC's next general rate case, provided that the underlying infrastructure
investment is included in calculating such rates.

(f) Computation of the economic development infrastructure
revenue requirement. – The LDC shall file information for each year showing the
computation of the Economic Development Infrastructure revenue requirement. The
total annual revenue requirement will be calculated for each year, as follows:

Economic
Development Infrastructure Costs $X,XXX,XXX

Less:
Accumulated depreciation XXX,XXX

Less:
Accumulated deferred income taxes XXX,XXX

Net
Economic Development Infrastructure Costs $X,XXX,XXX

Pre-tax
rate of return set forth in the relevant rate order X.XX%

Allowed
pre-tax return $X,XXX,XXX

Plus:
Depreciation expense XXX,XXX

Total $X,XXX,XXX

(g) Computation of the RAS. – The LDC will file for
Commission approval each year information showing the computation of the RAS
for each rate schedule and the revised tariffs that it proposes to charge
customers during the 12-month period. To compute
the RAS, the Economic Development Infrastructure revenue requirement shall
first be apportioned to each customer class based
on margin apportionment established in the LDC's most
recent general rate case.

The amount of the economic development infrastructure
revenue requirement apportioned to each rate schedule shall
then be divided by the annual therms established in the LDC's most recent
general rate case proceeding for each rate schedule to determine the RAS to the
nearest one-thousandth cent per therm.

(h) RAS Deferred Account. – The LDC shall maintain an RAS
Deferred Account for the purpose of recording (1) the economic development
infrastructure revenue requirement for the year, (2) the monthly RAS collected
from customers, and (3) the interest on the RAS Deferred Account. Interest will
be applied to the RAS Account at the LDC's authorized net-of-tax overall rate
of return.

Each month the LDC shall credit
the RAS Deferred Account for the amount of the RAS collected from customers.
The amount of the RAS collected from customers shall be
computed by multiplying the RAS for each rate schedule by the corresponding
actual therms of usage billed customers for the month.

(i) Reports. – Each LDC with an approved RAS shall provide
the following reports to the Commission:

(1) Monthly RAS Deferred Account reports reflecting the
activity recorded for the month.

(2) Annual RAS Deferred Account report to recover the
balance in the account and an annual computation of the Economic Development
Infrastructure revenue requirement supporting the RAS for the next 12-month
period.

(3) Annual reports by March 1 of each year the Eligible
Project is under construction summarizing the total infrastructure costs for
the preceding calendar year, the remaining balance to be spent on total
infrastructure costs, and the estimated completion date of the infrastructure.

(4) Annual reports by March 1 of each year for
completed Eligible Projects, providing the total amounts recovered from the RAS
for each project, the amount of gas consumed each year for each project, and
all customer additions and the respective natural gas load for each project.
Annual reports on completed eligible projects are required until the LDC's next
general rate case.

(NCUC Docket No. G-100, Sub
93, 10/17/2017)

R7‑01 APPLICATION OF RULES

These rules apply to public water utilities as defined in
G.S. 62‑3.

(NCUC Docket No. M‑100, Sub 75, 10/27/77.)

R7‑02 DEFINITIONS

(a) Utility. - The term "utility" when used in
these rules and regulations includes persons and corporations, or their
lessees, trustees, and receivers, now or hereafter, distributing or furnishing
water to the public for compensation as defined in G.S. 62‑3.

(b) Customers. - The word "customers" as used in
these rules shall be construed to mean any person, group of persons, firm,
corporation, institution, or other service body furnished water service by a
water utility.

(c) Municipality. - The term "municipality" when
used in these rules includes a city, a county, a village, a town, and any other
public body existing, created, or organized as a government under the
Constitution or laws of the State.

(d) Accidents. - Accidents as used herein are defined as
other than motor vehicle accidents which do not create a service interruption
that result in one or more of the following circumstances:

(1) Death of a person.

(2) Serious disabling to persons including
employees of a company.

(3) Damage to the property of the company
materially affecting its service to the public.

(4) Damage to the property of others amounting
to more than $1,000.

(e) Interruptions of Service. - "Interruptions of
service" as used herein means any interruption to the water supply whereby
at least ten (10) customers have no water service for more than two (2) hours,
whether scheduled or unscheduled.

(a) Location and Preservation of Records. - All records
shall be kept at the office or offices of the utility in North Carolina and
shall be available during regular business hours for examination by the
Commission, Public Staff or their duly authorized representatives.

(b) Reports to Commission. - Each utility shall prepare and
file an annual report to the Commission with copies to the Public Staff in
prescribed form, giving required information respecting its general operations.
Special reports shall also be made concerning any particular matter upon
request by the Commission or Public Staff.

(c) Accident Reports and Interruption of Service Reports. -
Each utility shall file a report with the Commission with a copy to the Public
Staff describing any accident or interruption of service in connection with the
utility's operation. The report shall be filed within the intervals specified
by the Commission from time to time, and shall contain the information required
on the reporting forms furnished by the Commission for that purpose.

(a) Approval Required. - Rates, schedules, rules,
regulations, special contracts, and other charges for the purchase, sale, or
distribution of water shall not become effective until filed with and approved
by the Commission.

(b) Manner of Filing. - Tariffs containing all the rates,
rules, and regulations of each utility shall be filed in the manner prescribed
by the Commission.

(c) Utility's Special Rules.

(1) A utility desiring to establish any rule or
requirement affecting its customers shall first make application to the
Commission for approval of the same, clearly stating in its application the
reason for such establishment.

(2) On or after ninety days from the effective
date of these rules and regulations any utility's special rules and regulations
now on file with the Commission which conflict with these rules will become
null and void unless they have been refiled and approved by the Commission.

(d) Charge for Returned Checks. - Each water utility shall
file tariffs with the Commission to impose charges in an amount to be approved
by the Commission for checks tendered on a customer's account and returned for
insufficient funds. This charge shall apply regardless of when the check is
tendered.

(NCUC Docket No. W‑100, Sub 6, 4/18/88.)

R7‑05 MAPS AND RECORDS

Each utility shall keep on file in its office suitable maps,
plans, and records showing the entire layout of every pumping station, filter
plant, reservoir, transmission and distribution system, with the location, size
and capacity of each plant, size of each transmission and distribution line,
fire hydrant, value and customer's service reservoirs, tanks, and other
facilities used in the production and delivery of water.

R7‑06 ACCESS TO PROPERTY

A utility shall at all reasonable times have access to
meters, service connections, and other property owned by it on customer's
premises for purposes of maintenance and operation, including cutting off
customer's supply of water for any of the causes provided for in these rules
and regulations or the rules and regulations of the utility.

Rule R07‑07 Adequacy of facilities.

All water production, treatment, storage, and distribution
facilities shall comply with the rules of the North Carolina Department of
Environment, Health and Natural Resources and the rules of other state and
local governmental agencies governing public water systems.

(a) Record. - Each utility shall keep a record of all
interruptions of service of more than two (2) hours' duration, whether
scheduled or unscheduled, affecting ten (10) or more customers and shall be
maintained for three (3) years. A report of such interruptions shall be filed
each month in the Office of the Chief Clerk with a copy to the Public Staff by
the 15th day of the month following the month for which the report is required
to be filed.

(b) Notice Required. - Insofar as practical every customer affected
shall be notified in advance of any contemplated work which will result in
interruption of service of any long duration, but such notice shall not be
required in case of interruption due to accident, the elements, public enemies,
strikes, which are beyond the control of the utility.

Dead ends in the distribution mains should be avoided so far
as possible. If such dead ends exist the utility should provide facilities for
flushing if conditions so require.

R7‑10 CROSS CONNECTIONS

No physical connections between the distribution system of a
public potable water supply and that of any other water supply shall be
permitted unless such other water supply is of safe, sanitary quality and has
been approved by the North Carolina Department of Environment, Health and
Natural Resources and other state or local governmental agencies with rules
pertaining to cross connection.

(NCUC Docket No. W-100, Sub 24, 2/22/94.)

R7‑11 RECORDS OF ACCIDENTS

Each utility shall keep a record of each accident happening
in connection with the operation of its plant, station, property, and
equipment, whereby any person shall have been killed or seriously injured, or
any substantial amount of property damaged or destroyed, which report shall be
made available to the Commission upon request.

R07-12. QUALITY OF WATER

(a) Every water utility shall comply with the rules of the
North Carolina Department of Environment and Natural Resources and the rules of
other state and local governmental agencies governing purity of water, testing
of water, operation of filter plant, and such other lawful rules as those
agencies prescribe.

(b) All water being supplied by water utilities subject to
the jurisdiction of the North Carolina Utilities Commission is required, as a
minimum, to meet the standards of water quality as set forth in the United
States Safe Drinking Water Act enacted in 1974 and as amended in 1986;
provided, that upon application in writing to the Commission and approval of
the Commission in writing, a water utility may have a specified deviation or
tolerance from the mineral content requirements of said United States Safe
Drinking Water Act enacted in 1974 and as amended in 1986, based upon regional
water characteristics or conditions and upon the economic feasibility of
providing treatment to the water or of locating alternate sources of water.

Each water utility shall maintain an adequate pressure for
its distribution system as required by the North Carolina Department of
Environment and Natural Resources and any other state or local governmental
agencies with rules pertaining to pressure requirements.

(a) A utility shall provide itself with one or more
portable pressure gauges or have available one or more graphic recording
pressure gauges, these instruments to be of a type and capacity suited to the
pressure of the system.

(b) A utility shall make a sufficient number of pressure
surveys each year to indicate the service furnished and to satisfy the
Commission of its compliance with the pressure requirements.

(c) All utilities having graphic recording gauges shall
keep at least one of these gauges in continuous service at the plant office or
elsewhere on the premises. All pressure records are to be kept in compliance
with the regulations of the Utilities Commission.

R7‑15 SERVICE CONNECTIONS

(a) Each water utility shall adopt a standard method for
installing a service connection or meter installation, which is included in the
"connection charge." Such method shall be set out with a written
description and drawings, together with a schedule of connection charges, to
the extent necessary for a clear understanding of the requirements and shall be
submitted to the Commission for its approval.

(b) The term "service connection" shall mean,
viz., the pipe between its main and the nearest property line, a curb cock and
curb box or other standard equipment and connections. The curb cock may be
installed at a convenient place between the property line and the curb.

(c) Temporary service shall be installed by mutual
agreement.

(d) The customer shall furnish and lay the necessary pipe
to make the connection from the property line nearest the utility's water main,
and shall keep the service line from the property line to the place of
consumption in good repair. The customer shall not make any change in or
rebuild such service line without giving written notice to the utility. All of
the foregoing shall be designated as "customer's service line."

(e) In the installation of a service line, the customer
must not install any tees or branch connection ahead of the meter location and
must leave the trench open and pipe uncovered until it is examined by an
inspector of the utility and shown to be free from any irregularity or defect.

(f) In any case where a reasonable doubt exists as to the
proper location and size for "customer's service line," the utility
shall be consulted and its approval of the location and size of line be secured
in writing.

R7‑16 EXTENSION OF MAINS

(a) General Provisions.

(1) A bona fide customer as referred to in
subsections (b) and (c) hereinafter shall be a customer of permanent and
established character, exclusive of the real estate developer or builder, who
receives water service at a premises improved with structures of a permanent
nature.

(2) Any facilities installed hereunder shall be
the sole property of the utility.

(3) The size, type, quality of materials, and
their location will be specified by the utility, and the actual construction
will be done by the utility or by a constructing agency acceptable to it.

(4) Adjustment of any difference between the
estimated cost and the reasonable actual cost of any main extension made
hereunder will be made within 60 days after the actual cost of the installation
has been ascertained by the utility.

(5) In case of disagreement or dispute
regarding the application of any provision of this rule, or in circumstances
where the application of this rule appears impracticable or unjust to either
party, the utility, applicant or applicants may refer the matter to the Public
Utilities Commission for settlement.

(6) Extensions for fire hydrant service,
private fire protection service, and temporary service will not be made under
this rule.

(7) The utility will not be required to make extensions
where grades have not been brought to those established by public authority.

(8) Where the property of the applicant or
applicants is located adjacent to a street or highway exceeding 70 feet in
width, or a freeway, waterway, or railroad right‑of‑way, the
utility may elect to install a main extension on the same side thereof as the
property of the applicant or applicants, and the estimated cost in such case
will be based on such an extension.

(9) Where an extension must comply with an
ordinance, regulation, or specification of a public authority, the estimated
cost of said extension shall be based upon the facilities required to comply
therewith.

(b) Extensions to Serve Individuals.

(1) The utility will extend its water
distribution mains to serve new bona fide customers at its own expense, other
than to serve subdivisions, tracts, housing projects, industrial developments
or organized service districts, when the required total length of main
extension from the nearest existing distribution main is not in excess of 100
feet per service connection. If the total length of main extension is in excess
of 100 feet per service connection applied for, the applicant or applicants for
such service shall be required to advance to the utility before construction is
commenced that portion of the reasonable estimated cost of such extension over
and above the estimated reasonable cost of 100 feet of the main extension per
service connection exclusive of the cost of service connections and meters and
exclusive of any costs of increasing the size or capacity of the utility's
existing mains or any other facilities used or necessary for supplying the
proposed extension. Such estimated reasonable cost shall not be based upon the
cost of a main in excess of 4 inches in diameter except where required by the
special needs of the applicant or applicants. The money so advanced will be
refunded by the utility without interest in payments equal to the reasonable
actual cost of 100 feet of the main extension, for which advance was made for
each additional service connection, exclusive of that of any customer formerly
served at the same location. Refunds will be made within 180 days after the
date of first service to a bona fide customer. No refunds will be made after a
period of 5 years from the date of completion of the main extension and the
total refund shall not exceed the amount advanced.

(2) Where a group of five or more individual
applicants request service from the same extension, or in unusual cases after
obtaining Commission approval, the utility at its option may require that the
individual or individuals advance the entire cost of the main extension as
herein provided and the utility will refund this advance as provided in
subsection (c)(2) of this rule.

(3) In addition to refunds made on the basis of
service connections attached directly to the extension for which the cost was
advanced as provided in subdivision (1) of this subsection, refunds also will
be made to the party or parties making the advances in those cases where
additional bona fide customers are served by a subsequent main extension,
either continuous or lateral, supplied from the original extension upon which
an advance is still refundable, whenever the length of such further extension
is less than 100 feet per service connection. Such additional refunds will
equal the difference between the 100‑foot allowance per service
connection and the length of each required subsequent extension multiplied by
the average cost per foot of the extension used as the basis for determining
the amount advanced. In those cases where subsequent customers are served
through a series of such main extensions, refunds will be made to the party or
parties making the advances in chronological order beginning with the first of
the extensions in the series from the original point of supply, until the
amount advanced by any party is fully repaid within the period of 5 years as
specified above. In those cases where two or more customers have made a joint
advance on the same extension, refunds will be made in the same proportion that
each advance bears to the total of said joint advance. Where the utility
installs a main larger than that for which the cost was advanced to serve an
individual or individuals, and a subsequent extension is supplied from such
main, the original individual or individuals will not be entitled to refunds
which might otherwise accrue from subsequent extensions.

(1) An applicant for a main extension to serve
a new subdivision, tract, housing project, industrial development or organized
service district shall be required to advance to the utility before
construction is commenced the estimated reasonable cost of installation of the
mains, from the nearest existing main at least equal in size to the main
required to serve such development, including necessary service stubs or
service pipelines, fittings, gates and housings therefor, and including fire
hydrants when requested by the applicant or required by public authority,
exclusive of meters. If additional facilities are required specifically to
provide pressure or storage exclusively for the service requested, the cost of
such facilities may be included in the advance upon approval by the Commission.

(2) The money so advanced will be subject to
refund by the utility without interest to the party or parties entitled
thereto. The total amount so refunded shall not exceed the amount advanced. Refunds
will be made under the following method:

Proportionate Cost Method. - For
each service connection directly connected to the extension, exclusive of that
of any customer formerly served at the same location, the utility will refund
within 180 days after the date of first service to a bona fide customer that
portion of the total amount of the advance which is determined from the ratio
of 100 feet of main to the total footage of main in the extension for which the
cost was advanced. No refunds will be made after a period of 5 years from the
date of completion of the main extension.

R7‑17 REFUSAL TO SERVE APPLICANTS

(a) Noncompliance with Rules and Regulations. - Any utility
may decline to serve an applicant until he has complied with State regulations
governing water service and the approved rules and regulations of the utility.

(b) Utility's Facilities Inadequate. - Until adequate
facilities can be provided, a utility may decline to serve an applicant if, in
the best judgment of the utility, it does not have adequate facilities to
render service applied for or if the intended use is of a character that is
likely to affect unfavorably service to other customers.

(c) Applicant's Facilities Inadequate. - The utility may
refuse to serve an applicant if, in its judgment, the applicant's installation
of water piping is regarded as hazardous or of such character that satisfactory
service cannot be given.

Any customer desiring service discontinued shall give a
written notice to the utility unless otherwise incorporated in the rules and
regulations of the utility. Until the utility shall have such notice the
customer may be held responsible for all service rendered.

R7‑20 UTILITY'S DISCONTINUANCE OF SERVICE

(a) Violation of Rules. - Neglect or refusal on the part of
a customer to comply with these rules or the utility's rules properly filed
with the Commission shall be deemed to be sufficient cause for discontinuance
of service on the part of the utility.

(b) Access to Property. - The utility shall at all
reasonable times have access to meters, service connections, and other property
owned by it on customer's premises for purposes of maintenance and operation.
Neglect or refusal on the part of the customer to provide reasonable access to
their premises for the above purposes shall be deemed to be sufficient cause
for discontinuance of service on the part of the utility.

(c) Notice of Discontinuance. - No utility shall
discontinue service to any customer for violation of its rules or regulations
without first having diligently tried to induce the customer to comply with its
rules and regulations. After such effort on the part of the utility, service
may be discontinued only after written notice of such intention, and that five
(5) days, excluding Sundays and holidays, shall have been given the customer by
the utility; provided, however, that where an emergency exists, or where
fraudulent use of water is detected, or where a dangerous condition is found to
exist on the customer's premises, the water may be shut off without such
notice.

(d) Disputed Bills. - In the event of a dispute between the
customer and the utility respecting any bill, the utility shall make forthwith
such investigation as shall be required by the particular case, and report the
result thereof to the customer. In the event that the matter in dispute cannot
be compromised or settled by the parties, either party may submit the fact to
the Commission for its opinion, and pending such opinion, service shall not be
discontinued.

(f) Reconnection Charge. - Whenever the supply of water is
turned off for the violation of rules and regulations, nonpayment of bill, or
fraudulent use of water, the utility may make a reconnection charge, approved
by the Commission, payable in advance, for restoring the service. The fee shall
be no more than fifteen dollars ($15.00); except, if the utility proves that
its actual and reasonable cost for restoring the service is greater than
fifteen dollars ($15.00), the fee may be set at no more than the proven cost.

(g) When Water Turned Off at Customer's Request. - When for
any valid reason the supply of water has been turned off at the customer's
request, the utility shall charge for restoring service the fee approved by the
Commission. The fee shall be no more than fifteen dollars ($15.00); except, if
the utility proves that its actual and reasonable cost for restoring the
service is greater than fifteen dollars ($15.00), the fee may be set at no more
than the proven cost.

(h) Turning Water On or Off, Disconnecting Meter, etc.,
Without Authority. - No plumber, owner, or other unauthorized person shall turn
the water on or off except in case of emergency at any corporation stop or curb
stop, or disconnect or remove the meter without the consent of the utility.

(a) Information as to Kinds of Service. - A utility shall,
when accepting application for water service, give full information to the
applicant concerning type of service to be rendered and rates which will be
applicable, advantageous, and suitable to his requirements.

(b) Meter Reading Method. - Each utility shall adopt some
means of informing its consumers as to the method of reading meters.

(c) Posting of Rates, Rules and Regulations. - Every
utility shall provide in its business office, near the cashier's window, where
it may be available to the public, the following:

(1) A copy of the rates, rules and regulations
of the utility applicable to the territory served from that office.

(2) A copy of these rules and regulations.

R7‑22 METHOD OF MEASURING SERVICE

(a) Metered. - All water sold within the State of North
Carolina, except as hereinafter stated, shall be by metered measurements. All
customers served under a given rate schedule shall have their water consumption
measured with meters having suitable characteristics.

(b) Unmetered. - Where it is impractical or uneconomical to
install meters to measure temporary service or to measure use of a fixed
character, then such service may be supplied unmetered, provided, that the
price charged for the service shall be estimated as nearly as practicable to
what would be charged if meters were in use.

(c) Waste or Fraud. - The utility shall have the right to
set meters or other devices for the detection and prevention of fraud or waste,
without notice to the customer.

(d) Payment for Water Used Where Meter Tampered With. - In
any case where a service meter or service facility has been tampered with so as
to interfere with accuracy of registration or indication, the utility whose
meter or service facilities have been tampered with shall be entitled to
payment for water used but not registered during a period not exceeding one
year prior to the date of discovery of the tampering, unless the time of
tampering can be shown, in which case the water not registered subsequent to
such time shall be paid for.

(e) Abuse of Flat Rate Service. - Wherever flat rate
service is furnished for a special use and a demonstrated abuse of such service
occurs, the utility shall have the right, upon written notice to the customer,
to meter such service and bill for same under an applicable schedule.

R7‑23 INFORMATION ON BILLS

(a) Meter Readings. - Bills rendered periodically shall
show the reading of the water meter at the beginning and end of the time for
which bill is rendered, the dates on which the readings were taken, and the
amount of water supplied.

(b) Mechanical Billing. - Utilities desiring to adopt
mechanical billing of such nature as to render compliance with all the terms of
subsection (a) impracticable, may make application to the Commission for relief
from part of these terms. After consideration of the reasons given when asking
for relief, the Commission may allow the omission of part of these
requirements.

(c) Billing. - Meters will be read as nearly as possible at
regular intervals. This interval may be monthly, or quarterly, however no
change shall be made in the billing interval except on approval of the
Commission.

R7‑24 SALE OF WATER

No utility shall charge or demand or collect or receive any
greater or less or different compensation for sale of water, or for any service
connected therewith, than those rates and charges approved by the Commission
and in effect at that time.

R7‑25 ADJUSTMENT OF BILLS FOR METER ERROR

(a) Meter Fast.

(1) Whenever a meter in service is found, upon
periodic, request or complaint test, to be more than two percent fast,
additional tests shall be made at once, to determine the average error of the
meter.

(2) Whenever a meter is found, upon periodic,
request or complaint test, to have an average error of registration of more
than two percent (2%) fast, the utility shall recalculate the monthly bills for
a period equal to one‑half of the time elapsed since the last test, but
in no case shall this period exceed six (6) months. (See exception noted in
subsection (d).) The method of recalculating the monthly bills shall be as
shown in the following example:

Example: A meter upon test was
found to register five percent (5%) fast. The consumption registered for a
billing period previous to test was 105,000 gallons. The error in registration
is determined by dividing 105,000 by 100% plus 5% or 105% which result is
1,000, this multiplied by 100 is 100,000 gallons, which is the proper amount to
be billed. After making such recalculations the utility shall refund to the
customer an amount equal to the difference between the amount previously billed
and the amount calculated as being the proper charge.

(b) Meter Slow.

(1) When a meter, upon periodic, request or
complaint test is found to have an average error of more than two percent (2%)
slow, the utility may recalculate the monthly bills for a period equal to one‑half
of the time elapsed since the last test, but in no case to exceed six (6)
months. The method of recalculating the monthly bills shall be as shown in the
following example:

Example: A meter upon test was
found to register five percent (5%) slow. The consumption registered for a
billing period previous to test was 105,000 gallons. The error in registration
is determined by dividing 105,000 by 100% minus 5% or 95% which result is
1105.26, this multiplied by 100 is 110,526 gallons, which is the proper amount
to be billed.

(2) After making such recalculations the
utility may collect from the customer an amount equal to the difference
between the amount previously billed and the amount calculated as being the
proper charge.

(c) Percent Error. - It shall be understood that when a
meter is found to have an error in excess of two percent fast or slow, the
figure for calculating the amount of refund or the amount to be collected by
the utility shall be that percentage of error as determined by the test, i.e.,
it is held that it is the duty of the utility to maintain the accuracy of its
measuring devices as nearly 100% as is commercially practicable. Therefore,
percent error shall be that difference as between 100% and that amount of error
as is indicated by a proper test.

(d) Refunds. - The burden of maintaining measuring
equipment, so that it will register accurately, is upon the utility; therefore,
if meters are found upon test to register fast, and if time for periodic test
has overrun to the extent that one-half (1/2) of the time elapsed since the
last previous test exceeds six months, the refund shall be for the six months
as specified in subsection (b), and in addition thereto a like refund upon
those months exceeding the periodic test period, provided, however, that the
Commission may relieve the utility from this requirement in any particular case
in which it is shown that the failure to make the periodic test was due to
causes beyond the utility's control. No bill shall be recalculated on account
of slow meter if the meter has not been tested within the periodic test period.

(e) Notification. - When a meter is tested and it is found
necessary to make a refund or back-bill a customer, the customer shall be
notified in writing and a copy of said notice filed by the utility.

(f) Nonregistering. - If a meter is found not to register
for any period, the utility shall estimate the consumption, based on a like
period of similar use.

R7‑26 INTERPRETATIONS

(a) Residential Service.

(1) "Residential service" is defined
as service to a householder or tenant living in a separate house or a separate
apartment in an apartment building.

(2) Should the owner of a multiple apartment
building undertake to furnish water to his tenants as a part of their monthly
rent, then such service shall be classed as "Commercial."

(3) A close member of a householder's family,
living with that householder and using the same water facilities, shall not be
classified as an additional service or as "Commercial."

(4) In cases where a householder or tenant
devotes some portion of the occupied building to commercial use and uses the
remainder as a residence, then the predominant use of water shall constitute
the basis for classification as either residential or commercial.

(b) Commercial Service.

(1) "Commercial service" is defined
to include service to each separate business enterprise, occupation, or
institution occupying for its exclusive use any unit or units of space as an
entire building, entire floor, suite of rooms or a single room, and using water
for such incidental use as the schedule of rates applicable to the particular
installation may permit. "Commercial service" shall apply to all
stores, offices, hotels, wholesale houses, garages, display windows, signs,
theaters, barber and beauty shops, churches, opera houses, auditoriums, lodge
halls, schoolhouses, banks, bakeries, and any other space occupied for
commercial purposes. Any rooming house, lodging house, resort, inn or tavern
renting more than four rooms to strangers or transients, without any previous
agreement for accommodation or as to the duration of stay, shall be classed as
a hotel and as such it comes under the "Commercial" classification.

(2) Where a single business enterprise or
institution occupies more than one unit of space in the conduct of the same
business, each separate unit will be metered separately and considered a
separate service unless the customer makes the necessary provisions whereby the
different units may be connected to permit the metering of all water used
through one meter. The above rule shall not be construed to allow any customer
to secure combined meter readings and billings by reason of ownership in the
same person, partnership, association, or corporation of different buildings or
units of space which are not used and operated by the customer and held out to
the public as one single business unit.

(c) Industrial Service. - "Industrial service" is
defined as a customer manufacturing or producing a commodity for the use and
sale to the general public.

(a) The rate fixed in the schedule to be paid for fire
hydrants contemplates the use of a sufficient amount of water through said
hydrants for the bona fide purpose of extinguishing fires, by or under the
supervision of fire department employees or officials, and does not authorize
the use of said hydrants and the water that flows therefrom by any unauthorized
person.

(b) The company may require all new consumers who desire
both regular commercial service and fire protection service to install separate
service lines, one to be used only for fire protection. The company may require
all old consumers who now have only one service connection for combined
commercial service and for fire protection to install separate lines, all
expenses incurred in making such change to be paid for by the company. In cases
where separate lines are installed, the consumer is not permitted to take water
from the fire protection line except for the extinguishing of fires or for fire
drills. Neither will the company permit an interconnection to be made between
the regular service line and the fire protection line.

R7‑28 METER TESTING FACILITIES AND EQUIPMENT

(a) Meter Test. - Each utility shall, unless specifically
excused by the Commission, provide for and have available such meter‑testing
instruments and other equipment and facilities as may be necessary to make the
tests required by these rules or other orders of the Commission. Such equipment
and facilities shall be satisfactory to and approved by the Commission and
shall be available at all reasonable times for the inspection and use of any
authorized representative of the Commission.

(b) Certification of Instruments and Equipment. - All
testing instruments and other equipment shall at all times be accompanied by a
certificate signed by a proper authority giving the date when it was last
certified and adjusted, and certificates, when superseded, shall be kept on
file in the office of the utility.

R7‑29 WATER METER ACCURACY

(a) Installation Test. - Every water service meter, whether
new or repaired, shall be in good order and shall be correct to within 2% fast
or slow before being installed for the use of any customer.

*Note - A meter failing to register 5% of the water passed
at those rates marked * should not be installed without correction.

(c) Method of Testing. - All tests to determine the
accuracy of registration of any water service meter shall be made with suitable
testing instruments.

R7‑30 LOCATION OF METERS

(a) Accessibility. - In the interest of safety and
convenience to the customer, and as a measure of economical operation to the
utility, it is required that all meters should be located at the curb; provided
however, that when such location is impractical, meters shall be placed outside
of the customer's building as near as possible to the point where the utility's
"service connection" joins the "customer's service line'';
provided, further, if neither of the foregoing requirements can be complied
with on account of physical, economic, or climatic conditions, the meter may be
placed within the building, preferably in the cellar, and when so placed within
the building, the meter shall be so located that it will be easily accessible
for reading and protected from freezing and mechanical damage.

(b) Meter Grouping. - When a number of meters are grouped,
every meter shall be tagged as to indicate the particular customer or premise
served by it.

R7‑31 SEALING METERS

Each utility, at its own option, may employ seals to prevent
tampering.

R7‑32 PERIODIC TEST

Meters of a compound, fireline, or turbine type containing a
current meter unit in a system supplying clear spring or well water shall be
periodically tested as follows. Under average conditions the following
intervals between tests shall not be exceeded.

Meter Sizes Years
Between Tests

1 1/2 4

2 4

3 3

4 2

6 1

R7‑33 REQUEST TEST

(a) Procedure. - Each utility furnishing water service
shall, without charge, make a test of the accuracy of any water meter upon
request of the customer, provided the customer does not request such test more
frequently than once in twenty‑four months. If a customer requests a
meter be tested more frequently than once in twenty‑four months and if
such meter shall be found to register not more than two percent fast, the
customer shall pay to the utility the fee as fixed by the Commission in
subsection (b) of this rule. A report giving the result of each request test
shall be made to the customer and to the Utilities Commission with a copy of
the Public Staff, and the complete original record shall be kept on file in the
office of the utility for at least five years. The customer or his
representative may be present when this test is run.

(b) Charge. - All tests shall be made as soon as
practicable. The charges fixed by the Commission for making such tests are as
follows:

Outlet 1 inch or less $2.50

Outlet 2 inches and over 1 inch
3.00

Outlet 3 inches and over 2 inches
3.75

Outlet 4 inches and over 3 inches
4.50

(NCUC Docket No. M‑100, Sub 75, 10/27/77.)

R7‑34 METER TEST RECORDS

(a) Reporting. - A complete record of all tests and
adjustments with sufficient data to allow checking of test calculations shall
be recorded by the meter man and shall be reported to the Commission as
required on such form or forms as may be prescribed by the Commission.

The test records shall be so kept that they may be readily
inspected and checked by the Commission or Public Staff.

(b) Meter Records. - All meters shall have a number plainly
stenciled or stamped on the meter case or lid, or stamped upon a metal strip,
suitably attached to meter or case.

It is recommended that a separate card be prepared for each
meter; that this card be so arranged that the date and data of each test may be
entered thereon; that the card be of such character that a marker system can be
used that will record the date of the last test and indicate the proper date
for the next periodic test required by these rules.

(c) Preservation of Records.

Length
of

Type of Records Time
to Be Retained

Interruption of 2
years from date of

Service Records
interruption

Accident Records Permanently

Meter Test Records 5
years

Pressure Records 2
years

(NCUC Docket No. M‑100, Sub 75, 10/27/77.)

R7‑35 UNIFORM SYSTEM OF ACCOUNTS

The Uniform System of Accounts for Water Utilities as
revised in 1984 by the National Association of Regulatory Utility
Commissioners, and all subsequent revisions thereto unless otherwise ordered by
the Commission, are hereby adopted by this Commission as the accounting rules
of this Commission for water companies and are prescribed for the use of all
water utilities under the jurisdiction of the North Carolina Utilities
Commission having annual gross operating revenues of $10,000 or more derived
from the sales of water, viz:

(1) "Availability rate" - means a fee
or charge paid to a water utility by a subscriber thereof for the availability
of water service being provided by the utility in a specific subdivision or
real estate development.

(2) "Customer" or
"subscriber" - for purposes of this rule, means a person who is a
nonuser of the water service provided by a water utility and who has subscribed
to the availability of water service.

(a) If a person subscribes to availability of
service to more than one lot, that person shall be considered a separate
customer for each separate lot served: except that two lots occupied by a
single dwelling may be considered as a single lot when the dwelling occupies a
portion of both lots in such a manner that no additional separate dwellings can
reasonably be anticipated on the lots.

(3) "Availability of water service" -
means that water of adequate quantity, quality and pressure is available at all
times in a water main located within 75 feet of the boundary of the
subscriber's property served, or such other distance as the Commission deems
reasonable, whether or not water is actually taken from the system by the
subscriber, and whether or not a service outlet is located inside the boundary
of the property served.

(b) Disclosure to Customer Required. - Each utility shall
first ensure that its customers have been given adequate disclosure of any
availability rate, in accordance with the provisions of this rule, prior to
accepting a customer's subscription to availability service or accepting the
initial assignment of a contract for availability service.

(1) Form of disclosure - The disclosure form
shall be a written instrument signed by the customer, and if reasonably
practical it shall be separate from other documents pertaining to the sale of
property. The written instrument may be part of a uniform contract entered into
between the developer of a subdivision and a lot purchaser in the subdivision,
or it may be part of a written agreement between the customer and the utility.
Acceptable sample disclosure forms are set out as an Appendix to Chapter 7 of
these rules.

(2) Information in disclosure - The disclosure
form shall contain the following information:

(a) Definitions of "availability rate"
and of "availability of water service" as contained in this rule.

(b) A statement specifying whether or not the
availability rate shall continue to be applicable to the subscriber even if at
some time in the future the subscriber's property should no longer be in use
and the water service should no longer be required by the subscriber.

(c) The amount of the availability rate approved
by the Utilities Commission, or if no amount has been approved, the amount that
is to be submitted for approval.

(d) A statement relating to the nature and
amount of any charges or fees that the customer may be obligated to pay if he
should wish to become a water user; i.e., tap on fees.

(e) Written certification by the customer that
the customer understands the meaning of such availability rate and that he
subscribes to the imposition of such rate for the availability of water
service.

(c) Approval of Disclosure Form Required. - The sample
disclosure forms contained in the Appendix to Chapter 7 of these rules shall
constitute adequate disclosure forms. Any disclosure form varying from the
sample disclosure forms shall be submitted to and approved by the Utilities
Commission prior to accepting the customer's subscription to availability
service or accepting the assignment of a contract for availability service. The
Commission shall either approve or disapprove the submitted form as promptly as
possible.

(d) Improper Disclosure. - Is Grounds for Denial of
Franchise and Rates. - In the event the Utilities Commission finds that
disclosure of the availability rate has not been made in accordance with the
provisions of this rule, the Commission may conclude that the availability rate
in whole or in part should not be allowed.

(e) Record of Subscription. - Each utility shall maintain
in its files a permanent record of each written certification, subscription or
contract relating to an availability rate imposed by that utility.

(f) Collection of Availability Rate. - No utility shall
collect an availability rate unless and until a tariff providing for such
availability rate has first been filed with and approved by the Utilities
Commission.

(g) Not Applicable When User Rates Are in Effect. - No
availability rate approved by the Utilities Commission shall be applicable to
any property when the regular user rates are in force for that property.

(h) Applicable Only When Franchise in Force. - All
availability rates approved by the Utilities Commission shall be applicable
only during the period of time that the utility franchise remains in force for
the property served, unless such Commission approval specifies otherwise.

(i) Amount of Availability Rate. - No availability rate
shall exceed the minimum rate established by the Commission for water users.
Both the availability rate and the minimum user rate are subject to change from
time to time upon approval by the Utilities Commission.

(j) Denial of User Service. - No utility may deny water
service to its customers for nonpayment of availability rates imposed under
contracts entered into prior to the effective date of this rule, except where
such availability rates had been authorized under a Commission order.

(k) This rule shall become effective on and after April 2,
1975.

(NCUC Docket No. W‑100, Sub 4, 4/2/75.)

R7‑37 BONDS

(a) Except as provided in paragraph (f), before temporary
operating authority, or a certificate of convenience and necessity is granted
to a water or sewer utility company, or before a water or sewer utility company
extends service into territory contiguous to that already occupied, without
regard to the date of the issuance of the existing franchise, the company must
furnish a bond to the Commission as required by G.S. 62-110.3. The company
shall ensure that the bond is renewed as necessary to maintain it in continuous
force in conformity to the rules herein.

(b) The form of the bond shall be as in the Appendix to
this Chapter.

(c) The amount of the bond shall be set by the Commission
on the basis of evidence presented during the application proceeding. In the
case of a no-protest application proceeding, the amount of the bond shall be
based on information in the application. In the event that the parties cannot
agree on the appropriate amount, the issue shall be referred to the Commission
for final decision. In setting the amount of a bond, the Commission shall
consider and make appropriate findings as to the following:

(1) Whether the applicant holds other water or
sewer franchises in this State, and if so its record of operation,

(2) The number of customers the applicant now
serves and proposes to serve,

(3) The likelihood of future expansion needs of
the service,

(4) If the applicant is acquiring an existing
company, the age, condition and type of the equipment,

(5) Any other relevant factors, including the
design of the system, and

(6) In the case of a contiguous extension, both
the original service area and the proposed extension.

The bond shall be in an amount, not less than ten thousand
dollars ($10,000), sufficient to provide financial responsibility in a manner
acceptable to the Commission.

(d) The bond may be secured by the joinder of a commercial
bonding company or other surety acceptable to the Commission. An acceptable
surety is an individual or corporation with a net worth, not including the
value of the utility, of at least twenty (20) times the amount of the bond or
five hundred thousand dollars ($500,000), whichever is less. The net worth of a
proposed surety must be demonstrated by the annual filing with the Commission
of an audited financial statement. Where a utility proposes to secure its bond
by means of a commercial surety bond of nonperpetual duration issued by a
corporate surety, the bond and commercial surety bond must specify that (a) if,
for any reason, the surety bond is not to be renewed upon its expiration, the
financial institution shall, at least 60 days prior to the expiration date of
the surety bond, provide written notification by means of certified mail,
return receipt requested, to the Chief Clerk of the North Carolina Utilities
Commission, 4325 Mail Service Center, Raleigh, North Carolina 27699-4325, that
the surety bond will not be renewed beyond the then current maturity date for
an additional period, (b) failure to renew the surety bond shall, without the
necessity of the Commission being required to hold a hearing or appoint an
emergency operator, allow the Commission to convert the surety bond to cash and
deposit said cash proceeds with the administrator of the Commission's bonding
program, and (c) the cash proceeds from the converted surety bond shall be used
to post a cash bond on behalf of the utility pursuant to section (e)(3) of this
rule.

(e) The bond may also be secured by posting with the
Commission cash or securities acceptable to the Commission at least equal in
value to the amount of bond. If the aggregate value of the securities posted
declines below the amount required to guarantee the full bond, the utility
shall make any additional deposits necessary to guarantee the bond. If the
aggregate value of the securities posted increases above the amount required to
guarantee the bond, the utility may withdraw securities as long as the
aggregate value remains at least equal to the amount required.

Acceptable securities are:

(1) Obligations of the United States of America

(2) Obligations of the State of North Carolina

(3) Certificates of deposit drawn on and
accepted by commercial banks and savings and loan associations incorporated in
the State of North Carolina

(4) Irrevocable letters of credit issued by
financial institutions acceptable to the Commission. If the irrevocable letter
of credit is nonperpetual in duration, the bond and letter of credit must
specify that (a) if, for any reason, the irrevocable letter of credit is not to
be renewed upon its expiration, the financial institution shall, at least 60
days prior to the expiration date of the irrevocable letter of credit, provide
written notification by means of certified mail, return receipt requested, to
the Chief Clerk of the North Carolina Utilities Commission, 4325 Mail Service
Center, Raleigh, NC 27699-4325, that the irrevocable letter of credit will not
be renewed beyond the then current maturity date for an additional period, (b)
failure to renew the irrevocable letter of credit shall, without the necessity
of the Commission being required to hold a hearing or appoint an emergency
operator, allow the Commission to convert the irrevocable letter of credit to
cash and deposit said cash proceeds with the administrator of the Commission's
bonding program, and (c) the cash proceeds from the converted irrevocable
letter of credit shall be used to post a cash bond on behalf of the utility
pursuant to section (e)(3) of this rule.

(5) Such other evidence of financial
responsibility deemed acceptable to the Commission. If the utility proposes to
post evidence of financial responsibility other than that permitted in (1),
(2), (3), and (4) above, a hearing will be held to determine if the form of the
proposed security serves the public interest and if the amount of the bond
proposed by the utility should be higher due to its lack of liquidity. At this
hearing, the burden of proof will be on the utility to show that the proposed
security under subparagraph (5) and the proposed amount of the bond will be in
the public interest.

(f) If a utility subject to the Commission's jurisdiction
is operating without a franchise and either

(1) it applies for a franchise, or

(2) the Commission asserts jurisdiction over
it, the utility shall satisfy the bonding requirement. If the Commission finds
that such a utility cannot meet that requirement, it may grant the utility
temporary operating authority for a reasonable period of time until it can
transfer the system or post the bond. If after the expiration of the time
period the company has neither posted the bond nor transferred the system, the
Commission may seek fines and penalties under G.S. 62-310.

(g) The company shall attach a separate notarized statement
to its annual report which is due on or before April 30th of each year stating
the amount of the bond, whether the bond is still in effect, and the date of
next renewal.

(SAMPLE
FORM OF WATER OR SEWER BOND ACCOMPANIED BY DEPOSIT OF CASH OR SECURITIES)

BOND

(Name of Utility) of (City), (State),
as Principal, is bound to the State of North Carolina in the sum of _____
Dollars ($___) and for which payment to be made, the Principal by this bond
binds (himself)(itself) and (his)(its) successors
and assigns.

THE CONDITION OF THIS BOND IS:

WHEREAS, the Principal is or intends to become a public
utility subject to the laws of the State of North Carolina and the rules and
regulations of the North Carolina Utilities Commission, relating to the
operation of a water or sewer utility (describe utility)

WHEREAS, North Carolina General Statutes §62‑110.3
requires the holder of a franchise for water or sewer service to furnish a bond
with sufficient surety, as approved by the Commission, conditioned as
prescribed in §62‑110.3, and Commission Rules R7-37 and/or R10-24, and

WHEREAS, the Principal has delivered to the Commission (description
of security) _____________ with an endorsement as required by the
Commission, and,

WHEREAS, the appointment of an emergency operator, either by
the superior court in accordance with North Carolina General Statute §62‑118(b)
or by the Commission with the consent of the owner, shall operate to forfeit
this bond, and

WHEREAS, this bond shall become effective on the date
executed by the Principal, and shall continue from year to year unless the
obligations of the Principal under this bond are expressly released by the
Commission in writing.

NOW THEREFORE, the Principal consents to the conditions of
this Bond and agrees to be bound by them.

This the ___ day of _____ 20__.

______________________________

(Name)

(SAMPLE FORM OF WATER
OR SEWER BOND WITH INDIVIDUAL SURETY)

BOND

(Name of Utility) of (City), (State), as
Principal, and (Name of Surety) as Surety, (hereinafter called
"Surety'') are bound to the State of North Carolina in the sum of _____
Dollars ($___) and for which payment to be made, the Principal and Surety by
this bond bind themselves their successors and assigns.

THE CONDITION OF THIS BOND IS:

WHEREAS, the Principal is or intends to become a public
utility subject to the laws of the State of North Carolina and the rules and
regulations of the North Carolina Utilities Commission, relating to the operation
of a water or sewer utility (describe utility)

WHEREAS, North Carolina General Statutes §62‑110.3
requires the holder of a franchise for water or sewer service to furnish a bond
with sufficient surety, as approved by the Commission, conditioned as
prescribed in §62‑110.3, and Commission Rules R7-37 and/or R10-24, and

WHEREAS, the Principal and Surety have delivered to the
Commission a Surety Bond with an endorsement as required by the Commission, and

WHEREAS, the appointment of an emergency operator, either by
the superior court in accordance with North Carolina General Statutes §62‑118(b)
or by the Commission with the consent of the owner, shall operate to forfeit
this bond, and

WHEREAS, if for any reason, the Surety Bond is not to be
renewed upon its expiration, the Surety shall, at least 60 days prior to the
expiration date of the Surety Bond, provide written notification by means of
certified mail, return receipt requested, to the Chief Clerk of the North
Carolina Utilities Commission, 4325 Mail Service Center, Raleigh, North
Carolina 27699-4325, that the Surety Bond will not be renewed beyond the then
current maturity date for an additional period, and

WHEREAS, failure to renew the Surety Bond shall, without the
necessity of the Commission being required to hold a hearing or appoint an
emergency operator, allow the Commission to convert the Surety Bond to cash and
deposit said cash proceeds with the administrator of the Commission's bonding
program, and

WHEREAS, said cash proceeds from the converted Surety Bond
shall be used to post a cash bond on behalf of the Principal pursuant to North
Carolina Utilities Commission Rules R7-37(a) and/or R10-24(e), and

WHEREAS, this bond shall become effective on the date
executed by the Principal, and shall continue from year to year unless the
obligations of the Principal under this bond are expressly released by the
Commission in writing.

NOW THEREFORE, the Principal and Surety consents to the
conditions of this Bond and agrees to be bound by them.

This the ___ day of _____ 20__.

____________________________

(Principal)

____________________________

(Surety)

(SAMPLE FORM OF WATER
OR SEWER BOND WITH CORPORATE SURETY)

BOND

(Name of Utility) of (City), (State),
as Principal, and (Name of Surety), a corporation created and existing under
the laws of (State), as Surety, (hereinafter called "Surety'') are bound
to the State of North Carolina in the sum of _____ Dollars ($___) and for which
payment to be made, the Principal and Surety by this bond binds themselves
their successors and assigns.

THE CONDITION OF THIS BOND IS:

WHEREAS, the Principal is or intends to become a public
utility subject to the laws of the State of North Carolina and the rules and
regulations of the North Carolina Utilities Commission, relating to the
operation of a water or sewer utility (describe utility)

WHEREAS, North Carolina General Statutes §62‑110.3
requires the holder of a franchise for water or sewer service to furnish a bond
with sufficient surety, as approved by the Commission, conditioned as
prescribed in §62‑110.3, and Commission Rules R-37 and/or R10-24, and

WHEREAS, the Principal and Surety have delivered to the
Commission a Surety Bond with an endorsement as required by the Commission, and

WHEREAS, the appointment of an emergency operator, either by
the superior court in accordance with North Carolina General Statutes §62‑118(b)
or by the Commission with the consent of the owner, shall operate to forfeit
this bond, and

WHEREAS, if for any reason, the Surety Bond is not to be
renewed upon its expiration, the Surety shall, at least 60 days prior to the expiration
date of the Surety Bond, provide written notification by means of certified
mail, return receipt requested, to the Chief Clerk of the North Carolina
Utilities Commission, 4325 Mail Service Center, Raleigh, North Carolina
27699-4325, that the Surety Bond will not be renewed beyond the then current
maturity date for an additional period, and

WHEREAS, failure to renew the Surety Bond shall, without the
necessity of the Commission being required to hold a hearing or appoint an
emergency operator, allow the Commission to convert the Surety Bond to cash and
deposit said cash proceeds with the administrator of the Commission's bonding
program, and

WHEREAS, said cash proceeds from the converted Surety Bond
shall be used to post a cash bond on behalf of the Principal pursuant to North
Carolina Utilities Commission Rules R7-37(a) and/or R10-24(e), and

WHEREAS, this bond shall become effective on the date
executed by the Principal, and shall continue from year to year unless the
obligations of the Principal under this bond are expressly released by the
Commission in writing.

NOW THEREFORE, the Principal and Surety consents to the
conditions of this bond and agree to be bound by them.

This the ___ day of ____ 20__.

_____________________________

(Principal)

_____________________________

(Surety)

By:___________________________

(SAMPLE FORM OF WATER
OR SEWER BOND SECURED BY IRREVOCABLE LETTER OF CREDIT OF NONPERPETUAL DURATION)

BOND

(Name of Utility) of (City), (State),
as Principal, is bound to the State of North Carolina in the sum of _____
Dollars ($ ___ ) and for which payment to be made, the Principal by this bond
binds (himself)(itself) and (his)(its) successors
and assigns.

THE CONDITION OF THIS BOND IS:

WHEREAS, the Principal is or intends to become a public
utility subject to the laws of the State of North Carolina and the rules and
regulations of the North Carolina Utilities Commission, relating to the
operation of a water and/or sewer utility (describe utility)

WHEREAS, North Carolina General Statutes §62‑110.3
requires the holder of a franchise for water and/or sewer service to furnish a
bond with sufficient surety, as approved by the Commission, conditioned as
prescribed in G.S. §62‑110.3, and Commission Rules R7-37 and/or R10-24,
and

WHEREAS, the Principal has delivered to the Commission an
Irrevocable Letter of Credit from (Name of Bank)
_____________________________ with an endorsement as required by the
Commission, and,

WHEREAS, the appointment of an emergency operator, either by
the Superior Court in accordance with G.S. 62-118(b) or by the Commission with
the consent of the owner, shall operate to forfeit this bond, and

WHEREAS, if for any reason, the Irrevocable Letter of Credit
is not to be renewed upon its expiration, the Bank shall, at least 60 days
prior to the expiration date of the Irrevocable Letter of Credit, provide
written notification by means of certified mail, return receipt requested, to
the Chief Clerk of the North Carolina Utilities Commission, 4325 Mail Service
Center, Raleigh, NC 27699-4325, that the Irrevocable Letter of Credit will not
be renewed beyond the then current maturity date for an additional period, and

WHEREAS, failure to renew the Irrevocable Letter of Credit
shall, without the necessity of the Commission being required to hold a hearing
or appoint an emergency operator, allow the Commission to convert the
Irrevocable Letter of Credit to cash and deposit said cash proceeds with the
administrator of the Commission's bonding program, and

WHEREAS, said cash proceeds from the converted Irrevocable
Letter of Credit shall be used to post a cash bond on behalf of the Principal
pursuant to North Carolina Utilities Commission Rules R7-37(e) and/or
R10-24(e), and

WHEREAS, this bond shall become effective on the date
executed by the Principal, and shall continue from year to year unless the
obligations of the Principal under this bond are expressly released by the
Commission in writing.

NOW THEREFORE, the Principal consents to the conditions of this
Bond and agrees to be bound by them.

This the ___ day of _____ 20__.

___________________________

(Principal)

By:
________________________

(SAMPLE FORM OF WATER
OR SEWER BOND SECURED BY COMMERCIAL SURETY BOND OF NONPERPETUAL DURATION ISSUED
BY CORPORATE SURETY)

BOND

(Name of Utility) of (City), (State),
as Principal, and (Name of Surety), a corporation created and existing
under the laws of (State), as Surety, (hereinafter called
"Surety''), are bound to the State of North Carolina in the sum of _____
Dollars ($ ___ ) and for which payment to be made, the Principal and Surety by
this bond bind themselves and their successors and assigns.

THE CONDITION OF THIS BOND IS:

WHEREAS, the Principal is or intends to become a public
utility subject to the laws of the State of North Carolina and the rules and
regulations of the North Carolina Utilities Commission, relating to the
operation of a water and/or sewer utility (describe utility)

WHEREAS, North Carolina General Statutes §62‑110.3
requires the holder of a franchise for water and/or sewer service to furnish a
bond with sufficient surety, as approved by the Commission, conditioned as
prescribed in §62‑110.3, and Commission Rules R7-37 and/or R10-24, and

WHEREAS, the Principal and Surety have delivered to the
Commission a Surety Bond with an endorsement as required by the Commission, and

WHEREAS, the appointment of an emergency operator, either by
the Superior Court in accordance with G.S. §62‑118(b) or by the
Commission with the consent of the owner, shall operate to forfeit this bond,
and

WHEREAS, if for any reason, the Surety Bond is not to be renewed
upon its expiration, the Surety shall, at least 60 days prior to the expiration
date of the Surety Bond, provide written notification by means of certified
mail, return receipt requested, to the Chief Clerk of the North Carolina
Utilities Commission, 4325 Mail Service Center, Raleigh, North Carolina
27699-4325, that the Surety Bond will not be renewed beyond the then current
maturity date for an additional period, and

WHEREAS, failure to renew the Surety Bond shall, without the
necessity of the Commission being required to hold a hearing or appoint an
emergency operator, allow the Commission to convert the Surety Bond to cash and
deposit said cash proceeds with the administrator of the Commission's bonding
program, and

WHEREAS, said cash proceeds from the converted Surety Bond
shall be used to post a cash bond on behalf of the Principal pursuant to North
Carolina Utilities Commission Rules R7-37(a) and/or R10-24(e), and

WHEREAS, this bond shall become effective on the date
executed by the Principal, for an initial _______ year term, and shall be
automatically
(No. of Years)

renewed for additional ___________

(No. of Years)

year terms, unless the obligations of the principal under
this bond are expressly released by the Commission in writing.

NOW, THEREFORE, the Principal and Surety consents to the
conditions of this Bond and agrees to be bound by them.

This the ___ day of _____ 20__.

_____________________________________

(Principal)

BY: __________________________________

_____________________________________

(Corporate Surety)

BY:
__________________________________

R7-38 NOTIFICATION OF CONTIGUOUS EXTENSION

(a) At least 30 days prior to constructing, acquiring, or
beginning the operation of any public utility plant or equipment capable of
providing water utility service to customers in territory contiguous to that already
occupied, for which, by virtue of its contiguity, no certificate of public
convenience and necessity is required, a public utility shall provide written
notice to the Commission of its intention to construct, acquire, or begin
operation of such plant. The notice shall be in a form approved by the
Commission and shall identify the area to be served by the extension.

(b) For purposes of this Rule, the phrase "territory
contiguous to that already occupied'' shall mean territory that is immediately
adjacent. In order to be immediately adjacent, the territory must share a
significant common boundary line with that already occupied. There may be a
geographic feature such as a roadway or stream along this boundary line, but
there must not be any intervening land or any substantial body of water. The
territory must be immediately adjacent to territory that is already occupied by
the water utility. A water utility occupies a territory by the presence of its
plant in the territory. A contiguous extension may not be made across
unoccupied territory that will not be served by the extension, whether
franchised to the utility or not.

(NCUC Docket No. W-100, Sub 17, 2/28/95.)

R7-39 WATER
SYSTEM IMPROVEMENT CHARGE MECHANISM

(a) Scope of Rule. – This rule provides the procedure for
the approval and administration of a rate adjustment mechanism pursuant to G.S.
62-133.12 to allow a utility to recover the incremental depreciation expense
and capital costs related to the utility's reasonable and prudently incurred
investment in eligible water system improvements.

(b) Definitions. – As used in this rule:

(1) "Capital costs" means the pretax
return on costs permitted to be capitalized pursuant to the National
Association of Regulatory Utility Commissioners (NARUC) Uniform System of
Accounts, net of accumulated depreciation and accumulated deferred income
taxes, using the current federal and state income tax rates and the utility's
capital structure, cost of long-term debt, and return on equity approved in the
utility's most recent general rate case.

(2) "Depreciation expense" means the
annual depreciation accrual rates employed in the utility's most recent general
rate case for the plant accounts in which the cost of each eligible water
system improvement is recorded applied to the cost of eligible water system
improvements.

(3) "Eligible water system improvements"
means the improvements set forth in G.S. 62-133.12(c) and shall include only
those improvements found necessary by the Commission to provide safe, reliable,
and efficient service in accordance with applicable water quality standards.

(4) "Incremental depreciation expense and
capital costs" means depreciation expense and capital costs that have been
incurred since the utility's most recent rate case and have not been included
in the utility's cost of service for ratemaking purposes.

(5) "Water System Improvement Charge or
WSIC" means an adjustment to customer bills that allows a utility to
recover the WSIC Revenue Requirement.

(6) "WSIC Revenue Requirement" means
the annual revenue required to allow a utility to recover the annual
incremental depreciation expense and capital costs of eligible water system
improvements.

(7) "WSIC Period" means the 12-month
period ended December 31 for Aqua North Carolina, Inc. and the 12-month period
ended March 31 for Utilities, Inc., and its North Carolina affiliates. The WSIC
Period for other water utilities shall be a 12-month period established by the
Commission in conjunction with the approval of a WSIC mechanism for that
utility.

(8) "WSIC mechanism" means a rate
adjustment mechanism approved by the Commission in a general rate case pursuant
to G.S. 62‑133.12.

(c) Request for Water System Improvement Charge Mechanism.
– A utility seeking approval of a WSIC mechanism shall include in its
application for a general rate increase under G.S. 62-133 and Commission Rule
R1-17 the following:

(1) A three-year plan that includes the
following:

a. A detailed description of all proposed eligible
water system improvements expected to be completed in the initial WSIC Period
and an estimate of the cost of the improvements and dates when the improvements
will be placed into service; and

b. A brief description of the proposed eligible water
system improvements, estimated costs, and completion dates for improvements
that the utility plans to complete during the two years following the initial
WSIC Period.

(2) The proposed effective dates of the WSIC
and semiannual adjustments to the charge.

(3) Testimony, affidavits, exhibits, or other
evidence demonstrating that a WSIC is in the public interest and will enable
the utility to provide safe, reliable, and efficient service in accordance with
applicable water quality standards.

(4) Any other information required by the
Commission.

(d) Customer Notice. – The notice to customers of the
utility’s general rate increase application shall include the proposed WSIC
mechanism and the estimated impact of the charges under the mechanism on the
utility's monthly service rates. The Notice shall include the following
statement:

Water
System Improvement Charge Mechanism

Pursuant to G.S.
62-133.12 and Commission Rule R7-39, the Company is requesting that the
Commission approve a Water System Improvement Charge Mechanism. This mechanism
will allow the Company to recover the annual incremental depreciation expense
and capital costs of eligible water system improvements completed and placed in
service between rate cases. In support of this request, the Company has filed a
three-year plan with its application which list various projects which may be
eligible for recovery pursuant to this mechanism, the cost and/or estimated
costs of those projects, and the estimated completion date of those projects.
By law, the cumulative maximum charges between rate cases that the Company can
recover through the use of this mechanism cannot exceed five percent of the
total service revenues that the Commission will approve in this rate case.
Customers may subscribe to the Commission’s electronic notification system
through the Commission's website at www.ncuc.net to receive notification of any
Company requests to utilize the Water System Improvement Charge Mechanism, if
approved.

In this Application,
the Company has requested that the Commission allow it to recover total service
revenues of $____________. Five percent of these revenues is $____________. If
the Commission permits the Company to recover the revenue requirements
requested in the Application, the Company projects that the average monthly
water bill for a typical residential customer (based upon monthly water usage
of x,xxx gallons) would be $_______. Based upon these figures, the Company
estimates that the maximum that the average residential customer's monthly
water bill could be increased by this adjustment mechanism between rate cases
is $________.

The Commission may
eliminate or modify any rate adjustment mechanism approved in this case upon a
finding that it is no longer in the public interest.

(e) General Rate Case Review. – Following notice and
hearing, the Commission shall approve a WSIC mechanism only upon a finding that
it is in the public interest.

(f) Initiation of Charge. – Once a WSIC mechanism is
approved and eligible water system improvements are in service, the utility may
file a request with the Commission for authority to impose the water system
improvement charge pursuant to the mechanism, to be effective no less than 60
days after filing the request. The Company shall also provide a copy of the
request to the Public Staff.[1] Prior to the
effective date, the Public Staff shall schedule the request for Commission
consideration at the regularly scheduled staff conference and recommend that
the Commission issue an order approving, modifying and approving, or rejecting
the proposed water system improvement charge. The Public Staff shall formally
notify the Commission at least 15 days in advance of the date that the request
shall be scheduled for Commission consideration at the regularly scheduled
staff conference.

(g) Computation of the WSIC Revenue Requirement. – The WSIC
Revenue Requirement shall be computed for each WSIC Period as follows:

Eligible water
system improvements $X,XXX,XXX

Less: Accumulated
depreciation X,XXX,XXX

Less: Accumulated
deferred income taxes X,XXX,XXX

Net plant
investment $X,XXX,XXX

Pre-tax rate of
return X.XX%

Capital costs
$X,XXX,XXX

Plus:
Depreciation expense XXX,XXX

Subtotal,
excluding regulatory fee $X,XXX,XXX

Regulatory fee
gross-up factor XXXX

Total
$X,XXX,XXX

(h) Computation of Water System Improvement Charge. –

(1) The WSIC shall be expressed as a percentage
carried to two decimal places and shall be applied to the total utility bill of
each customer under the utility's applicable service rates and charges.

(2) The WSIC shall be computed by dividing the
annual WSIC Revenue Requirement by the projected revenues of the utility during
the 12‑month period following implementation of the charge.

(i) Semiannual Adjustments. – A utility may file a request
for a WSIC adjustment no more frequently than semiannually.

(1) The request shall include the computation
and supporting data for the adjustment.

(2) Cumulative WSIC Revenue Requirements may
not exceed five percent of the total annual service revenues approved in the utility's
last general rate proceeding.

(3) The procedural requirements set forth in
subsection (f) of this Rule shall apply to requests for semiannual adjustments.

(j) Experience Modification Factor. – The WSIC shall be
modified through the use of an experience modification factor (EMF) that
reflects the difference between the WSIC Revenue Requirement and the revenues
that were actually realized under the WSIC during the WSIC Period. The EMF
shall remain in effect for a 12-month period. Pursuant to G.S. 62-130(e), any
overcollection of reasonable and prudently incurred costs of the utility for
eligible water system improvements to be refunded to a utility's customers
through operation of the EMF shall include an amount of interest at such rate
as the Commission determines to be just and reasonable, not to exceed the
maximum statutory rate.

(k) Water System Improvement Charge Reset. – The WSIC shall
be reset at zero as of the effective date of new base rates established in the
utility's general rate case. Thereafter, only the incremental depreciation
expense and capital costs of new eligible water system improvements that have
not previously been reflected in the utility's rates shall be recoverable
through the WSIC.

(l) Audit and Reconciliation. – The WSIC shall be subject
to the following:

(1) Within 60 days following the end of each
WSIC Period, each utility shall file a report, in a format prescribed by the
Commission, reconciling its actual eligible water system improvement costs,
actual WSIC revenues, and EMF computation.

(2) The Public Staff shall audit the utility’s
actual eligible water system improvement costs, actual WSIC revenues, and EMF
computation, and shall file a report on its audit no later than four months
after the end of the WSIC Period of the utility.

(m) Ongoing Three-Year Plan. – Within 60 days following the
end of each WSIC Period, the utility shall file an updated three-year plan
containing the information prescribed in Section (c)(1) of this Rule and any
other information required by the Commission.

(n) Quarterly Filings with the Commission. – Within 45 days
after the end of each calendar quarter, the utility shall file the following
reports:

(1) A quarterly earnings report consisting of
the following:

a. A balance sheet and income statement for the
calendar quarter and calendar year to date for the utility;

b. A statement of the per books net operating income
for the calendar quarter and calendar year to date for each rate division of
the utility based on North Carolina ratemaking;

c. A statement of rate base at the end of the
calendar quarter for each rate division of the utility based on North Carolina
ratemaking; and

d. The number of customers and gallons sold for each
month of the calendar quarter for each rate division by rate type (meter size,
flat rate, etc.).

(2) A quarterly report of WSIC collections from
customers consisting of amounts collected for the quarter by rate division and
rate type.

(3) A construction status report which includes
by rate division the following information for each eligible water system
improvement project:

a. The costs incurred during the quarter;

b. The cumulative amount incurred;

c. The estimated total cost for each project;

d. The estimated completion date; and

e. The actual completion date.

(o) Elimination or Modification of WSIC Mechanism. – After
notice to the utility and opportunity to be heard, the Commission may eliminate
or modify any previously authorized WSIC mechanism upon a finding that it is
not in the public interest.

(p) Burden of Proof. – The burden of proof as to whether a
WSIC mechanism is in the public interest, the correctness and reasonableness of
any WSIC, and whether the investment in the water system improvements was
reasonable and prudently incurred shall be on the utility.

(NCUC Docket No. W-100, Sub 54, 6/06/2014.)

CHAPTER 7.
APPENDIX

SUBSCRIPTION FOR
AVAILABILITY OF WATER SERVICE

NAME OF DEVELOPMENT
OWNER OR UTILITY

NAME AND LOCATION OF
SUBDIVISION

NAME AND ADDRESS OF
SUBSCRIBER

DOLLAR AMOUNT OF
PROPOSED AVAILABILITY RATE

NOTICE

IMPORTANT DISCLOSURE

READ CAREFULLY

1. Subscriber
hereby makes application for water service for the following lot(s) in
_________________________________________________________________________________(subdivision)

2. Subscriber
hereby agrees to pay an availability rate for availability of water service as
defined herein. The initial availability rate to be proposed by Developer or
Utility is $ ___. per __________. (month) (quarter) (year).

3. Subscriber
hereby agrees to pay the tap fee or other fees described below in order to
receive regular water user service instead of availability service as follows:

4. All availability
rates, fees, rules and regulations for availability of water service are
subject to change from time to time upon approval by the North Carolina
Utilities Commission.

5. An
"availability rate" shall mean a fee or charge paid to a water
utility by a subscriber thereof for the availability of water service being
provided by the utility in a specific subdivision or development.

6. "Availability
of water service" shall mean that water of adequate quantity, quality, and
pressure is available at all times in a water main located within 75 feet of
the boundary of the subscriber's property served, or such other distance as the
Commission deems reasonable, whether or not water is actually taken from the
system by the subscriber, and whether or not a service outlet is located inside
the boundary of the property served.

7. The
availability rate for water service shall continue to be applicable to the
subscriber even if at some time in the future the subscriber's property should
no longer be in use and the water service should no longer be required by the
subscriber. The subscriber, however, shall not be required to pay the
availability rate during such time that the regular water user rates are in
force for the subscriber's property.

CERTIFICATION

I have read the above disclosure and understand that I am
agreeing to pay an availability rate for the availability of water service to
my lot(s), whether or not I use my lot(s).

_______________________________

Signature of
Subscriber(s)

_______________________________

Name and Address of
Subscriber(s)

_______________________________

Date

_______________________________

Witness

_______________________________

Date Accepted

SUBSCRIPTION FOR
AVAILABILITY OF SEWER SERVICE

NAME OF DEVELOPMENT
OWNER OR UTILITY

NAME AND LOCATION OF
SUBDIVISION

NAME AND ADDRESS OF
SUBSCRIBER

DOLLAR AMOUNT OF
PROPOSED AVAILABILITY RATE

NOTICE

IMPORTANT DISCLOSURE

READ CAREFULLY

1. Subscriber
hereby makes application for sewer service for the following lots(s) in_____________________________

2. Subscriber
hereby agrees to pay an availability rate for availability of sewer service as
defined herein. The

initial
availability rate to be proposed by Developer or Utility is $ ____ per
__________ (month) (quarter) (year).

3. Subscriber
hereby agrees to pay the tap fee or other fees described below in order to
receive regular sewer user service instead of availability service as
follows:_____________________________________________________________

4. All
availability rates, fees, rules and regulations for availability of sewer
service are subject to change from time to time upon approval by the North
Carolina Utilities Commission.

5. An
"availability rate" shall mean a fee or charge paid to a sewer
utility by a subscriber thereof for the availability of sewer service being
provided by the utility in a specific subdivision or development.

6. "Availability
of sewer service" shall mean that safe, sanitary and unoffensive
collection, treatment or disposal of sewage is available at all times by means
of a sewer main located within 75 feet of the boundary of the subscriber's
property served, or such other distance as the Commission deems reasonable,
whether or not sewage is actually delivered to the system by the subscriber,
and whether or not a service outlet is located inside the boundary of the
property served.

7. The
availability rate for sewer service shall continue to be applicable to the
subscriber even if at some time in the future the subscriber's property should
no longer be in use and the sewer service should no longer be required by the
subscriber. The subscriber, however, shall not be required to pay the
availability rate during such time that the regular sewer user rates are in
force for the subscriber's property.

CERTIFICATION

I have read the above disclosure
and understand that I am agreeing to pay an availability rate for the availability
of sewer service to my lot(s), whether or not I use my lot(s).

_____________________________________

Signature
of Subscriber(s)

_____________________________________

Name
and Address of Subscriber(s)

_____________________________________

Date

____________________________________

Witness

____________________________________

Date Accepted

SUBSCRIPTION FOR
AVAILABILITY OF WATER AND SEWER SERVICE

NAME OF DEVELOPMENT
OWNER OR UTILITY

NAME AND LOCATION OF
SUBDIVISION

NAME AND ADDRESS OF SUBSCRIBER

DOLLAR AMOUNT OF
PROPOSED AVAILABILITY RATE

NOTICE

IMPORTANT DISCLOSURE

READ CAREFULLY

1. Subscriber
hereby makes application for water and sewer service for the following lot(s)
in _____________________

2. Subscriber
hereby agrees to pay an availability rate for availability of water and sewer
service as defined herein. The initial availability rate to be proposed by
Developer or Utility is $ ____ per _________ (month) (quarter) (year) for water
and $ ____ per ________ (month) (quarter) (year) for sewer.

3. Subscriber
hereby agrees to pay the tap fee or other fees described below in order to
receive regular water and sewer user service instead of availability service as
follows: __________________________________________________

4. All
availability rates, fees, rules and regulations for availability of water and
sewer service are subject to change from time to time upon approval by the
North Carolina Utilities Commission.

5. An
"availability rate" shall mean a fee or charge paid to a water or
sewer utility by a subscriber thereof for the availability of water or sewer
service being provided by the utility in a specific subdivision or development.

6. (a)
"Availability of water service" shall mean that water of adequate
quantity, quality, and pressure is available at all times in a water main
located within 75 feet of the boundary of the subscriber's property served, or
such other distance as the Commission deems reasonable, whether or not water is
actually taken from the system by the subscriber, and whether or not a service
outlet is located inside the boundary of the property served.

(b) "Availability of sewer
service" shall mean that safe, sanitary and unoffensive collection,
treatment or disposal of sewage is available at all times by means of a sewer
main located within 75 feet of the boundary of the subscriber's property served,
or such other distance as the Commission deems reasonable, whether or not
sewage is actually delivered to the system by the subscriber, and whether or
not a service outlet is located inside the boundary of the property served.

7. The
availability rate for water and sewer service shall continue to be applicable
to the subscriber even if at some time in the future the subscriber's property
should no longer be in use and the water and sewer service should no longer be
required by the subscriber. The subscriber, however, shall not be required to
pay the availability rate during such time that the regular water and sewer
user rates are in force for the subscriber's property.

CERTIFICATION

I have read the above disclosure
and understand that I am agreeing to pay an availability rate for the
availability of water and sewer service to my lot(s), whether or not I use my
lot(s).

________________________________________

Signature
of Subscriber(s)

________________________________________

Name
and Address of Subscriber(s)

________________________________________

Date

_____________________________________

Witness

_____________________________________

Date Accepted

(NCUC Docket No. W‑100, Sub 4, 4/2/75.)

R8‑01 APPLICATION OF RULES

(a) These rules shall apply to any person, firm, or
corporation (except municipalities, or agents thereof) which is now or may
hereafter become engaged as a public utility in the business of furnishing
electric current for domestic, commercial or industrial consumers within the
State of North Carolina.

(b) The rules are intended to define good practice which
can normally be expected. They are intended to insure adequate service and to
protect the public from unfair practices and the utilities from unreasonable
demands. The cooperation of the utilities with the Commission and the Public
Staff is expected.

(c) In any case where compliance with any of these rules
introduces unusual difficulty, such rule may be temporarily waived by the
Commission upon application of the utility. If in such case compliance with the
rule would cost more than the results of such compliance are worth to the
public and consumers of electric current, it may be permanently set aside by
the Commission.

(NCUC Docket No. M‑100, Sub 75, 10/27/77.)

Rule R8-02 DEFINITIONS

In the interpretation of these rules the word
"utility" shall be taken to mean any person, firm or corporation
engaged in the business of supplying electric current to domestic, commercial,
or industrial users within this State except a municipality or electric
membership corporation organized under G.S. 117-6 et seq. and the word
"consumer" shall be taken to mean any person, firm, corporation, municipality,
or other political subdivision of the State supplied by any such utility.
Unless specifically stated otherwise, capacity of generation facilities is
provided in alternating current (AC) delivered at the point of interconnection
to the distribution or transmission facilities.

(NCUC Docket No. E-100, Sub 134, 3/18/2015.)

R8‑03 RECORDS

(a) A complete record shall be kept of all tests and
inspections required under these rules as to the quality or condition of
service which is rendered.

(b) All records of tests shall contain complete information
concerning the test, including the date, hour, and place where the test was
made; the name of the person making the test, and the result.

(c) All records required by these rules shall be preserved
by the utility for at least one year after they are made. Such records shall be
kept within the State at the office or offices of the utility, and shall be
open for examination by the Commission or its representatives or the Public
Staff at all reasonable hours.

(NCUC Docket No. M‑100, Sub 75, 10/27/77.)

R8‑04 REPORTS TO COMMISSION

Each utility shall, at such times and in such form as the
Commission shall prescribe, report to the Commission and the Public Staff the
results of all tests required to be made or the information contained in any
records required to be kept by the utility.

(NCUC Docket No. M‑100, Sub 75, 10/27/77.)

R8-04A CUSTOMER SATISFACTION METRICS AND AVERAGE RESPONSE TIME

PERFORMANCE

(a) Purpose. – The purpose of this rule is to establish
standards for measuring and reporting customer call center performance by
electric utilities that own and operate electric power systems in North
Carolina.

(1) Each electric utility in this State shall
file a report on its call center performance on a quarterly basis. The data
reported shall be submitted within 30 days of the end of each quarter.

(2) Call center performance reports shall
include:

(a) Customer satisfaction with the automated response
system and customer service representatives.

(i) Customer satisfaction metrics shall be
transaction‑based.

(ii) Customer satisfaction metrics shall be based on
customers rating their satisfaction with the automated response system and the
customer service representatives.

(iii) Results from customers rating their
satisfaction with the automated response system and the customer service
representatives shall be reported to the Commission for each quarter and the
preceding quarters, if any, of a calendar year.

(b) Answer Rate for live voice-handled calls

(i) Total calls answered by a customer service
representative as a percentage of total calls received minus technology-handled
calls shall be reported on a 12-month rolling average basis.

(c) Average Speed of Answer for live voice- and
technology-handled calls.

(i) Average Speed of Answer in seconds shall be
reported on a 12-month rolling average basis.

(NCUC Docket No. E-100, Sub 138, 3/9/15.)

Rule R8-04B NEW RESIDENTIAL SERVICE INSTALLATION INDICES

(a) Purpose. – The purpose of this rule is to establish
standards for measuring and reporting new residential service installations and
the average number of days in construction per installation for both
underground and overhead installations by electric utilities that own and
operate electric power systems in North Carolina.

(1) Each electric utility in this State shall
file a report on its new residential service installations on an annual basis.
The data reported shall be submitted within 60 days of the end of each calendar
year.

(2) Service installation reports shall include:

(a) The number of new residential service installations
for both underground and overhead installations for the preceding calendar
year.

(b) The average number of days in construction per
installation for both underground and overhead installations for the preceding
calendar year.

(3) The beginning point for measuring the
number of days in construction for both underground and overhead installations
shall be the date the builder or customer acknowledges that the building site
is ready for the installation work to begin. This occurs after the meter base
and load wires have been installed, the site is to final grade, no obstacles
impede construction, and any other construction prerequisites have been
satisfied.

(4) The ending point for measuring the number
of days in construction for both underground and overhead installations shall
be the date when new service is energized to the meter base.

(NCUC Docket No. E-100, Sub 138, 3/9/15.)

R8‑05 INSPECTION OF PLANT AND EQUIPMENT

(a) Each utility shall maintain its plant, distribution
system and facilities at all times in proper condition for use in rendering
safe and adequate service.

(b) Each utility shall, upon request of the Commission or
the Public Staff, file with it a statement regarding the condition and adequacy
of its plant, equipment, facilities and service in such form as may be required
by the Commission.

(NCUC Docket No. M‑100, Sub 75, 10/27/77.)

R8‑06 COMPLAINTS

Each utility shall make a full and prompt investigation of
all service complaints made to it by its consumers, either directly or through
the Commission or the Public Staff. It shall keep a record of all such
complaints received which record shall show the name and address of the
complainant, the date and character of the complaint and the adjustment or
disposal made thereof. Such record shall be kept for a period of one year.

(NCUC Docket No. M‑100, Sub 75, 10/27/77.)

R8‑07 INFORMATION FOR CONSUMERS

Each utility shall upon request inform its consumers as to
the method of reading meters. It is recommended that an exhibition meter be
kept on display in each office maintained by a utility.

R8‑08 METER READINGS AND BILL FORMS

(a) Bills shall be rendered for metered service
periodically, and shall show the readings of the meter at the beginning and end
of the period for which the bill is rendered, the number and kinds of units of
service supplied, and the date of the last meter reading.

(b) Each bill shall bear upon its face the date when the
bill was mailed, or left at the premises of the consumer, or the latest date on
which it may be paid without loss of discount or incurring of penalty.

R8‑09 LOCATION

(a) No consumer's meter shall be installed in any location
where it may be unreasonably exposed to heat, cold, dampness or other cause of
damage, or in any unduly dirty or inaccessible location.

(b) Meters should not be placed in coal or wood bins or on
partitions forming such bins, or on any unstable supports subject to vibration.

(c) Meters should be easily accessible for reading,
testing, and making necessary adjustments and repairs. When several meters are
placed on one meter board the distance between centers should not, where
practicable, be less than 15 inches, and each "house" loop should be
tagged or marked to indicate the circuit metered.

(d) Each customer shall provide a suitable and convenient
place for the location of meters, where they will be readily accessible at any
reasonable hour for the purpose of reading, testing, repairing, etc., and such
other appliances owned by the utility and placed on the premises of the
consumer shall be so placed as to be readily accessible at such times as are
necessary, and the authorized agent of the utility shall have authority to
visit such meters and appurtenances at such times as are necessary in the
conduct of the business of the utility.

R8‑10 TESTING FACILITIES

(a) Each utility furnishing metered electric service shall,
unless specifically excused by the Commission, provide and have available such
meter laboratory, standard meters, instruments and facilities as may be
necessary to make the tests required by these rules, together with such
portable indicating electrical testing instruments, watt hour meters, and
facilities of suitable type and range for testing service watt hour meters,
voltmeters and other electrical equipment, used in its operations, as may be deemed
necessary and satisfactory to the Commission.

(b) All portable indicating electrical testing instruments
such as voltmeters, ammeters and watt hour meters, when in regular use for
testing purposes, shall be checked against suitable reference standards
periodically, and with such frequency as to insure their accuracy whenever used
in testing service meters of the utility.

R8‑11 METHOD OF DETERMING AVERAGE ERROR OF
METERS

(a) In determining the average error of a watt hour meter,
the following procedure is recommended:

(1) All meters whenever possible, shall be
tested at the following three loads: one‑tenth of the current rating of
the meter, normal load and at rating.

(2) The average of these tests obtained by
multiplying the results of the test at normal load by three (3), adding the
results of the tests at one‑tenth rating and at the current rating, and
dividing the total by five, shall be deemed the condition of the meter.

(3) In an installation where it is impossible
to obtain a load of ten percent (10%) of the rating, or one hundred percent
(100%) of the rating of the meter tests shall be made at the nearest obtainable
loads to ten percent (10%) and one hundred percent (100%) of the rating of the
meter and the values given in the ratios as stated above.

(b) To determine normal load, use the percentage of
connected load indicated below for the class of service metered.

Percentage
of

Class of Service Metered
Connected Load

Residence and Apartment Lighting 40%

Elevator Service
40%

Factories (Individual Drive),
Churches and Offices 45%

Factories (Shaft Drive), Theatres,
Clubs, Entrances,

Hallways, and General Store
Lighting 60%

Restaurants, Pumps, Air
Compressors, Ice Machines

and Moving Picture Theatres
70%

Signs and Window Lighting and
Blowers 100%

(c) When a meter is connected to an installation consisting
of two or more of the above classes of load, the normal load would be the sum
of the normal loads for each class.

R8‑12 METER ACCURACY

(a) Creeping. - No watt hour meter which registers on
"no load" when the applied voltage is less than one hundred and ten
percent (110%) of standard service voltage shall be placed in service or
allowed to remain in service.

(b) Initial Accuracy Requirements. - No watt hour meter
shall be placed in service which is in any way mechanically defective, or which
has incorrect constants, nor shall any watt hour meter be maintained in service
which is not adjusted to meet the following requirements:

Average error not over 2% plus or
minus;

Error at heavy load not over 2%
plus or minus;

Error at light load not over 4%
plus or minus.

(c) Adjustment after Test. - Whenever a test made by the
utility or by the Commission on a service watt hour meter connected in its
permanent position in place of service shows that the average error is greater
than that specified above, the meter shall be adjusted to bring the average
error within the specified limits.

(d) Allowable Error. - A service watt hour meter having an
average error of not more than 2% plus or minus, may be considered as correct,
and no adjustment of charges shall be entailed by such an error.

(NCUC Docket No. E‑100, Sub 29, 11/29/77.)

R08-13 PERIODIC TESTS OF METERS

Each watt hour meter shall be tested according to the
following schedule, while connected, if practical, in its permanent position in
place of service:

(1) Two and three wire commutating type and mercury
type meters, up to and including 50 amperes rated capacity of meter element,
shall be tested at least once every 18 months.

(2) Two and three wire commutating type and mercury
type meters of over 50 amperes rated capacity of meter element shall be tested
at least once every 12 months.

(3) Two and three wire single phase induction type
meters, up to and including 25 amperes rated capacity of meter element, shall
be tested at least once every 96 months.

(4) Two and three wire single phase induction type
meters of over 25 amperes rated capacity of meter element shall be tested at
least every 96 months.

(5) Self contained polyphase meters, up to and
including 50 kW rated capacity, shall be tested at least once every 72 months.

(6) Self contained polyphase meters of over 50 kW rated
capacity shall be tested at least once every 72 months.

(7) Polyphase meters, connected through current
transformers or current and potential transformers, to circuits up to and including
50 kW rated capacity, shall be tested at least once every 48 months.

(8) Polyphase meters, connected through current
transformers or current and potential transformers, to circuits of over 50 kW
rated capacity, shall be tested at least once every 48 months.

(9) A statistical sampling program for self contained
single phase watt hour meters may be used by any utility in lieu of the
periodic testing program specified under subdivisions (3) and (4) above
provided the utility files with the Commission a statistical sampling plan
which is approved by the Commission and which conforms to the following
criteria:

a. The plan submitted shall conform to
accepted principles of statistical sampling and should be evaluated by
qualified independent mathematical statisticians.

b. The plan shall include an adequate policy
for testing meters on request and a consumer protection procedure for high
bills due to fast meters to compensate for the fact that an individual meter
may not be tested for a period longer than the present eight year schedule.

c. Meters shall be divided into homogeneous
groups such as manufacturer's types and, if necessary, into homogeneous groups
on the basis of location or other environmental factors which may affect the
performance of the meters.

d. A sample shall be taken each year, from
each homogeneous group, of a sufficient size to demonstrate with reasonable
assurance the condition of the group from which the sample is drawn.

e. It is extremely important that each meter
in each group be drawn with known probability, and the sample must be selected
at random. (In most probability sampling systems involved in meter registration
control, it is expected that every meter in the group will have an equal chance
to be drawn; however, the criteria are written to allow a wider choice of
probability sampling systems.) In order to accomplish random sampling, it is
necessary to use a table of random numbers, or some equivalent mechanical or
numerical procedure.

f. The sampling plan shall be designed to
provide information on which the utility may base a program to maintain its
meters in an acceptable degree of accuracy throughout their service life in
accordance with the requirements of the Commission and in keeping with proper
standards for good customer relations. The plan shall contain a table of
mathematically calculated sample sizes and related values in accordance with g
below for determining the characteristics of the homogeneous groups,
accompanied by curves for determining the risk of making an incorrect decision
which may be detrimental to the customer or to the utility.

g. An acceptable sampling program is one
having the property that, when applied to a meter group in which the proportion
of meters with registrations greater than 102% is as high as 0.03, then the
probability that the group will be judged to be satisfactory (and no corrective
action taken) shall be no greater than 0.05. A sample size at least 400 meters
for a plan based on the attributes method is recommended. If a variable plan is
used, select a minimum sample size so that the variable plan under minimum
sample size will have roughly the same operating characteristics curve as the
attributes plan for the minimum sample size stated above. If a group of meters
does not meet the performance criteria, then an established program of
corrective action shall be followed.

h. The corrective action shall consist of an
accelerated test and maintenance program to raise the accuracy performance of
the group to acceptable standards or it may consist of retirement of the meters
in the group from service in an accelerated rate. The accelerated test program
should provide for testing at rates which vary in accordance with the
calculated percentage of meters in the group outside the acceptable limits of accuracy
but not less than 20% of the group tested per year. When any group of meters is
so placed on an accelerated test program the meters, selected each year for
test, shall be selected on the basis of the longest time since last test.
Meters so tested and placed into service shall be sampled as a separate group
from the remainder of the original group not tested. When the sample results of
the remainder of the original group indicate that the group has come up to
acceptable limits the two components of the group may be consolidated for
sampling.

i. Reports shall be made to the Commission
annually to indicate the number of meters in each homogeneous group in service
at the beginning of each year, the number of meters making up the sample for
each such group, the test results for each group and any corrective action
taken.

(a) Upon reasonable notice, when requested in writing by
the consumer, each utility shall test the accuracy of the meter in use by the
consumer.

(b) No deposit or payment shall be required from the
consumer for a meter test, except when the consumer has requested, within the
previous twelve months, that the same meter be tested, in which case the
consumer shall be required by the utility to deposit with it an amount as
determined by the Commission to cover the reasonable cost of such test.

(c) A schedule of deposits or fees for testing various
classifications of meters shall be filed with, and approved by, the Commission.

(d) The amount so deposited with the utility shall be
refunded or credited to the consumer (as a part of the settlement in the case
of a disputed account) if the meter is found, when tested, to register more
than 2% fast; otherwise the deposit shall be retained by the utility.

(e) The consumer may, if he so requests, be present when
the utility conducts the test on his meter, or if he desires, may provide (at
his expense) an expert, or other representative appointed by him to be present
at the time of the meter test.

(f) A report of the results of the meter test shall be made
within a reasonable time after the completion of the test. This report shall
give the name of the consumer requesting the test, the date of the request, the
location of the premises where the meter is installed, the type, make, size and
serial number of the meter, the date of removal, the date tested, and the
results of the test, a copy of which shall be supplied to the consumer upon
request. The utility shall inform the consumer that he has a right to request
such written copy of the report of the meter test.

Each utility supplying alternating current shall adopt a
standard frequency, the suitability of which may be determined by the
Commission, and shall maintain this frequency within 2% plus or minus of
standard at all times during which service is supplied; provided, however, the
momentary variations of frequency of more than 5%, which are clearly due to no
lack of proper equipment or reasonable care on the part of the utility, shall
not be construed as a violation of this rule.

R8‑17 STANDARD VOLTAGE

(a) Each electric supplier shall adopt and file with the
Commission standard average service voltages available from its distribution
class facilities. The filing shall contain the nominal voltage, base voltage,
lower limit and upper limit. The voltage maintained at the point of delivery
shall be reasonably constant and variations therein should not normally exceed
the limits set forth in this rule.

(1) In order to promote standardization of
service voltages, the following standard nominal service voltages are hereby
adopted by the Commission as the preferred standard nominal service voltages:

NOMINAL SYSTEM VOLTAGE

Two-wire

Three-wire

Four-Wire

Single‑Phase Systems

120*

120/240*

Three‑Phase Systems

240

480

600**

2400

4160

4800

6900

1380

23000

34500

208Y/120

240/120

480Y/277

4160Y/2400

8320Y/4800

12000Y/6930

12470Y/7200

13200Y/7620

13800Y/7970

20780Y/12000

22860Y13200

24940Y/14400

34500Y/19920

*see (a)(2) below

** This classification covers the
range of nominal voltages from 550 to 600 volts.

(2) Each electric supplier operating within the
State of North Carolina under the jurisdiction of the Commission shall offer
120/240 volt, single‑phase service. No electric supplier shall offer
115/230 volt single‑phase service or other such similar variant of
120/240 volt single‑phase service except upon specific authorization of
the Commission.

(b) In order to promote harmony between the service of
electric suppliers and the utilization voltage requirements of presently manufactured
equipment, the following service voltage variations are permitted:

(1) For service rendered for individual
residential use or specifically for lighting purposes, the voltage variations
shall not exceed five percent (5%) above or below the standard base voltage.

(2) For other service the voltage variations
shall not exceed ten percent (10%) above or below the standard base voltage.

(c) An electric supplier may elect to deliver service at a
nominal voltage which is not standard on its system. The variation in the
nonstandard voltage shall not exceed the limits set forth above for the type of
service being rendered.

(d) Upon approval of the Commission and proper notification
to its customers a utility may cease to deliver a particular voltage.

(e) Variations in voltage in excess of those specified
caused by the addition of customer equipment without proper notification to the
electric supplier, by the operation of customer's equipment, by the action of
the elements, by infrequent and unavoidable fluctuations of short duration due
to system operations, by conditions which are part of practical operations and
are of limited extent, frequency, and duration, or by emergency operations
shall not be construed a violation of this rule.

(f) Consumers shall select, install, maintain and operate
their electrical equipment so as to cause the least interference with the
regulation of the electric supply system. Three‑phase motors in excess of
20 horsepower, single‑phase motors in excess of five horsepower and other
apparatus with high‑starting or fluctuating currents must be installed in
accordance with the supplier's filed tariffs and rules and regulations.

(g) Greater variations in voltage for service to
installation which permit greater variations than those required above may be
allowed upon specific authorization by this Commission.

(NCUC Docket No. E‑100, Sub 9, 4/25/72.)

R8‑18 VOLTAGE SURVEYS AND RECORDS

Each utility shall provide itself with suitable indicating
or recording voltmeters, and shall make a sufficient number of voltage tests
periodically so as to insure compliance with the voltage requirements cited
above. These tests shall be made at appropriate points upon the utility's
distribution lines.

(a) No utility shall discontinue the service to any
consumer for violation of its rules or regulations, or for nonpayment of bills
without having first tried to induce the consumer to comply with its rules and
regulations or to pay his bills.

(b) Service shall actually be discontinued only after at
least 24 hours' written notice of such intention shall have been given to the
consumer by the utility; provided, however, that where fraudulent use of
current is detected, or where a dangerous condition is found to exist on the
consumer's premises, the service may be shut off without notice in advance.

(c) Said notice herein prescribed may be given by leaving a
copy thereof with such consumer at the premises where such service is rendered,
or by mailing same through the United States mail to the consumer's last known
post‑office address.

(d) Consumer shall have the privilege of paying delinquent
bill at any time prior to actual disconnection of service lines supplying him;
provided, that where the utility dispatches an employee to the premises of any
consumer for the purpose of disconnecting service lines, a fee not to exceed
one dollar may be added to consumer's delinquent bill to cover cost to utility
of dispatching such employee to consumer's premises, which fee must be paid as
a part of consumer's delinquent account.

(e) Whenever the service is turned off for violation of
rules or regulations, or fraudulent use of current, the utility may make a
reasonable charge for the cost of renewing it.

(f) Where a consumer has been required to make a guarantee
deposit this shall not relieve consumer of the obligation to pay the service
bills when due, but where such deposit has been made and service has been
discontinued on account of nonpayment of bill, then in such event unless
consumer shall, within forty-eight hours after service has been discontinued,
apply for reconnection of service and pay the account, then in such event the
utility shall apply the deposit of such consumer toward the discharge of such
account and shall as soon thereafter as practicable, refund the consumer any
excess of the deposit.

R8‑21 REPLACEMENT OF METERS AND CHANGES IN
LOCATION OF SERVICE

(a) Whenever a consumer requests the replacement of the
service meter on his premises, such request shall be treated as a request for
the test of such meter, and as such, shall fall under the provisions of Rule R8‑14.

(b) Whenever a consumer moves from the location where
current is used by him, and thereby requires the disconnecting and/or
connecting at a new location of the electric supply, and the same work has been
done for him within one year preceding, the utility may make a charge, subject
to such charge having been approved by the Commission.

R8‑22 UTILITY MAY WITHHOLD SERVICE UNTIL
CUSTOMER COMPLIES WITH

RULES AND REGULATIONS

Any utility may decline to serve a customer or prospective
customer until he has complied with the State and municipal regulations on
electric service, and the rules and regulations of the utility furnishing the
service, provided such rules and regulations have been approved by the
Commission.

R8‑23 EXTENT OF SYSTEM ON WHICH UTILITY MUST
MAINTAIN SERVICE

Each electric utility, unless specifically relieved in any
case by the Commission from such obligation, shall operate and maintain in
safe, efficient and proper condition, all the facilities and instrumentalities
used in connection with the regulation, measurement and delivery of electric
current to any consumer up to and including the point of delivery into the
wiring owned by the consumer.

R8‑24 EXTENSIONS

Each utility shall adopt rules, subject to the approval of
the Commission, under which it will, upon written request for service by a
prospective consumer or a group of prospective consumers, located in the same
neighborhood, make the extension necessary to give service and furnish service
connection or connections.

R8‑25 RATE SCHEDULE, RULES AND REGULATIONS

(a) Copies of all schedules of rates for service, forms of
contracts, charges for service connections and extensions of circuits, and of
all rules and regulations covering the relations of consumer and utility, shall
be filed by each utility in the office of the Commission. Copies of such rates,
rules and regulations shall be furnished consumers or prospective consumers
upon request.

(b) Consumers applying for more than one class of service
on the same premises shall so arrange their wiring that each class of service
can be metered separately (unless utility has schedules on file covering
service to a combination of classes on one meter), and consumers purchasing any
particular class of service shall confine the use of current supplied
thereunder to the purposes set forth in the rate scheduled for such class.
Separate meters will be required for each building on the same premises except
outhouses and for each separate class of service in the same building except
when a commercial lighting consumer occupies the same building in part for
residential purposes the utility may supply both the commercial and residential
lighting through one meter at the commercial lighting rate, or on rural lines
at the rural rate.

(c) Consumers desiring service in excess of 25 HP may be
required to enter into term contracts with the utility supplying service, for
the period established in the schedule of rates filed with the Commission.
Failure to enter into contract for the period specified in the rate schedule
will entitle the utility to impose a surcharge of five percent on all bills
rendered to such consumers. The utility shall not be required to supply service
for a period of less than one year except under rate schedules designed
expressly for short‑term service. In case of initial contracts for
service where the investment required of the utility is large, the Commission
may require contracts of sufficiently long term to justify the investment,
regardless of the provisions of the rate schedule filed for such service.

(NCUC Docket No. E‑100, Sub 16, 2/9/73.)

R8-26 Safety rules and regulations

The current rules and regulations of the American National
Standards Institute (ANSI) entitled "National Electrical Safety Code"
are hereby adopted by reference as the electric safety rules of this Commission
and shall apply to all electric utilities which operate in North Carolina under
the jurisdiction of the Commission.

(a) For utilities with annual accounting and reporting
periods based on the calendar year, effective January 1, 2002, and for
utilities with fiscal year accounting and reporting periods, effective with
fiscal years beginning in 2002, the Uniform System of Accounts Prescribed for
Public Utilities and Licensees Subject to the Provisions of the Federal Power
Act, as currently embodied in the United States Code of Federal Regulations,
Title 18, Part 101, and as revised periodically, is hereby adopted by this Commission
as its accounting rules for electric utilities and is prescribed for the use of
all electric utilities under the jurisdiction of the North Carolina Utilities
Commission, subject to the following exceptions and conditions unless otherwise
ordered by the Commission:

(1) All orders and practices of the Commission
in effect as of the effective date of this Rule with any accounting impacts
that conflict with provisions of the Uniform System of Accounts shall remain in
effect, and future such orders and practices with such impacts shall supersede
the provisions of the Uniform System of Accounts for North Carolina retail
jurisdictional purposes.

(2) The electric utilities under the
jurisdiction of the Commission must apply to the Commission for any North
Carolina retail jurisdictional use of the following accounts:

(b) Each electric utility subject to this Rule shall file
the following with the Commission:

(1) In the case of utility filings and other
correspondence with the FERC or its staff, on and after the effective date of
this Rule, regarding the utility's accounting practices or the Uniform System
of Accounts, including but not limited to requests for accounting guidance and
or approval of accounting entries, the portion of the initial filing or
correspondence by the utility relating to said accounting practices or the
Uniform System of Accounts, and the final disposition of the matter.

(2) In the case of other changes in the
utility's accounting practices prompted by FERC orders, directives, or
correspondence, a written explanation of the change in practice, along with
relevant supporting documentation.

(3) In the case of the regular periodic or any
special compliance audits performed on and after the effective date of this
Rule by the FERC or its staff, notification of the commencement of the audit
and a copy of the final audit report.

(c) The accounting treatment to be used for contributions
in aid of construction is as follows:

(1) Contributions in aid of construction
received before the effective date of this Rule are to be accounted for in the
manner prescribed by the Commission in Docket No. E-100, Sub 18.

(2) Contributions in aid of construction
received on and after the effective date of this Rule are to be accounted for
in the manner prescribed by the Uniform System of Accounts adopted herein.

Class B: Electric utilities having annual electric
operating revenues of $1,000,000 or more but less than $2,500,000.

Class C: Electric utilities having annual electric
operating revenues of $150,000 or more but less than $1,000,000.

Class D: Electric utilities having annual electric
operating revenues of $25,000 or more but less than $150,000.

(e) Electric utilities with annual gross operating revenues
of less than $25,000 shall be exempt from the provisions of this Rule until the
average of their annual gross revenues, for a period of three consecutive
years, shall exceed $25,000. Electric utilities exceeding the $25,000
threshold but falling below the minimum threshold of 10,000 megawatthours of
annual sales included in the FERC Uniform System of Accounts shall nevertheless
utilize the FERC Uniform System of Accounts as specified for Nonmajor
utilities.

Unless otherwise specified by the Commission, all records
required by these rules shall be preserved for the period of time specified in
the current edition of the National Association of Regulatory Utility
Commissioners' publication "Regulations to Govern the Preservation of
Records of Electric, Gas and Water Utilities."

(NCUC Docket No. M-100, Sub 128, 10/27/99.)

R8‑29 APPLICATION FOR SERVICE AREA BY ELECTRIC
SUPPLIER; PUBLICATION

OF NOTICE

Whenever there is filed with the Commission an application
by an electric supplier for the assignment of a service area, as provided in
G.S. 62‑110.2(c), the applicant will publish a notice thereof in form
approved by the Commission once a week for four successive weeks in a newspaper
of general circulation in the county or counties where such area is situated.

A petition for intervention by another electric supplier may
contain an application for assignment to the intervenor of the same area
applied for by the applicant or any portion thereof, but may not contain
application for any area not applied for by the applicant. The Commission may,
however, in its discretion, consolidate two or more applications for hearing.

(NCUC Docket No. E‑100, Sub 3, 1/28/66.)

R8‑31 HEARING AT LEAST SIXTY DAYS AFTER
PUBLICATION

A hearing upon any application will not be commenced before
the expiration of at least sixty days after the last day of publication of
notice by the applicant.

(NCUC Docket No. E‑100, Sub 3, 1/28/66.)

R8‑32 ASSIGNMENT OF SERVICE AREAS ON
COMMISSION'S MOTION

The Commission may on its own motion set for hearing the
assignment of any service area which the Commission deems should be assigned
pursuant to G.S. 62‑110.2(c) notwithstanding there is no application to
have such area assigned by any electrical supplier, and any hearing set on the
Commission's own motion shall be subject to the provisions of this article
relating to the notice to electrical suppliers in the adjoining territory and
to the time for hearing.

(NCUC Docket No. E‑100, Sub 3, 1/28/66.)

R8‑33 RATE SCHEDULES, RULES AND REGULATIONS,
UNDERGROUND WIRING,

PROMOTIONAL PAYMENTS

(a) Copies of all schedules of rates, charges, service
regulations and forms of service contracts used or to be used within the State
by any electric membership corporation doing business in North Carolina shall
be filed with the Utilities Commission for information purposes and each such
electric membership corporation shall keep a copy of such schedule, rates,
charges, service regulations and contracts open to public inspection, which
shall be furnished to members or prospective members upon request, as provided
in G.S. 62‑138(f).

(b) For the purposes of this article, the rates, charges
and service regulations of electric membership corporations shall be deemed to
include the provisions of G.S. 62‑3(24) defining "rate" to mean
every compensation, charge, fare, tariff, schedule, toll, rental and
classification or any of them demanded, observed, charged, or collected by any
electric membership corporation for any service, product or commodity offered
by it to their members and any rules, regulations, practices or contracts
affecting any such compensation, charge, fare, tariff, schedule, toll, rental
or classification.

(c) The schedule of rates, charges and service regulations
under this article shall specifically include any provisions of rates, charges
or service regulations or any other source relating to underground wiring to
members' premises.

(d) In addition to filing such schedules of rates, charges
and service regulations under this article, any electric membership corporation
proposing to pay any compensation or consideration or to furnish any equipment
to secure the installation or adoption of electric service shall first file
with the Commission a schedule of such compensation or consideration or
equipment to be furnished and received approval thereof by the Commission as
provided by G.S. 62‑140(c) as amended in 1965.

(NCUC Docket No. E‑100, Sub 5, 6/16/66.)

R8‑34 TITLE AND DOCKET ASSIGNMENTS FOR RATES
AND REGULATIONS OF

ELECTRIC MEMBERSHIP CORPORATIONS

Electric membership corporations (including electric
"cooperatives" domesticated in North Carolina, both hereafter called
"EMCs'') will carry the designation "EC" in all of their filings
with the Commission, whether under G.S. 62‑138(f) or otherwise, together
with their respective number designations by the United States Rural
Electrification Administration. (Out‑of‑state EMCs domesticated in
North Carolina will also carry immediately following their REA number
designation, the letter (s) denoting their respective states, since in several
instances the numbers are the same as assigned to North Carolina EMCs.) For
example, Randolph Electric Membership Corporation, Asheboro, North Carolina,
was originally assigned the REA number 36; Randolph's filings will therefore
carry the designation "EC‑36"; in like manner, each of the
other EMCs will be designated and permanently identified.

(NCUC Docket No. E‑100, Sub 5, 6/16/66.)

R08-35 REQUIREMENTS AS TO SIZE AND FORM OF RATE FILINGS

Information filed pursuant to G.S. 62-138(f) will ordinarily
be on 8-1/2" by 11" bond paper.

(NCUC Docket No. E-100, Sub 5, 6/16/66.)

R8‑36 FILINGS TO REFLECT EFFECTIVE DATE,
CHANGES AND PREVIOUS FILINGS

SUPERSEDED

Each filing pursuant to G.S. 62‑138(f) will reflect
(a) the original date of the matter filed and the effective date thereof, (b)
the subject number thereof (EMC filing of all kinds to begin with Sub 1 and to
continue as Sub 2, Sub 3, etc., as is the Commission's present practice), and (c)
any other information appropriate in clearly identifying the filing, i.e., what
it is superseding that has been previously filed, if anything.

(NCUC Docket No. E‑100, Sub 5, 6/16/66.)

R8‑37 COPIES REQUIRED

At least five (5) copies of each filing will be forwarded to
the Commission.

(NCUC Docket No. E‑100, Sub 5, 6/16/66.)

R8‑38 TIME REQUIREMENTS FOR FILINGS

Matter will be filed within at least thirty (30) days after
its effective date, and may be filed earlier or in advance of the effective
date.

(NCUC Docket No. E‑100, Sub 5, 6/16/66.)

R08-39 TRANSMISSION OF FILINGS

Filings may be effectuated by transmission of the matter
filed via covering letter, addressed to the Chief Clerk of the Commission.

R08-40 REPORT OF
IMPENDING EMERGENCIES, LOAD REDUCTIONS AND SERVICE INTERRUPTIONS IN BULK
ELECTRIC POWER SUPPLY AND RELATED POWER SUPPLY FACILITIES.

(a) Definitions. — For the purpose of this rule, a bulk
electric power supply interruption shall be any interruption or loss of service
to customers of any public electric utility, or electric membership corporation
engaged in the generation or transmission of electric energy caused by or
involving an outage of any generating unit or of electric facilities operating
at a nominal voltage of 69 kV or higher. In determining the aggregate of loads
which are interrupted, any load which is interrupted in accordance with the
provisions of contracts permitting interruptions in service shall not be
included.

(b) Telephonic Reports. — Every public electric utility and
electric membership corporation engaged in the generation or transmission of
electric energy shall report promptly (Monday - Friday, during regular work
hours) to the Operations Division of the Commission Staff and the Electric
Division of the Public Staff of the North Carolina Utilities Commission by
telephone any event as described below:

(1) Any decision to issue a public request for
reduction in use of electricity.

(2) Any action to reduce firm customer loads by
reduction of voltage for reasons of maintaining adequacy of bulk electric power
supply.

(3) Any action to reduce firm customer loads by
manual switching, operation of automatic loadshedding devices, or any other
means for reasons of maintaining adequacy of bulk electric power supply.

(4) Any loss in service for 15 minutes or more
of bulk electric power supply to aggregate loads in excess of 200,000 kW.

(5) Any outage in bulk power supply facilities,
accident to system facilities, delays in construction, or substantial delays in
making repairs following unscheduled outages that are of consequence on a
subregional or State basis, or which may constitute an unusual hazard to the
reliability of electric service.

(c) Telegraphic or Telephonic Reports. — Every public
electric utility and electric membership corporation engaged in the generation
or transmission of electric energy shall report any event as described below to
the Operations Division of the Commission Staff and Electric Division of the
Public Staff of the North Carolina Utilities Commission by telephone or
telegram.

These reports are to be made no later than the beginning of
the Commission's next regular work day (Monday - Friday) after the interruption
occurred. Events requiring a report are as follows:

Any loss in service for 15 minutes or more of bulk electric
power supply to aggregate loads exceeding the lesser of 100,000 kW or half of
the current annual system peak load, and not required to be reported under
subsection (b). See subsection (d) for information to be reported.

(d) Information to Be Reported. — The information supplied
in the initial report should include at least the approximate territory
affected by the interruption, the time of occurrence, the duration, or an
appraisal of the likely duration, if service is still interrupted, an estimate
of the number of customers and amount of load involved, and whether any known critical
services, such as hospitals, pumping stations, traffic control systems, etc.,
were interrupted. To the extent known or suspected, the report desirably will
include a description of the initial incident resulting in the interruption.
The Commission or its representative may require further reports during or
after the period of interruption and restoration of service, such reports to be
made by telephone, telegraph or letter, as required.

(e) Special Investigations and Reports.

(1) If so directed by the Commission, an entity
experiencing a condition, as described in subsections (b) and (c), shall submit
a full report of the circumstances surrounding such occurrence and the
conclusions the entity has drawn therefrom. The report shall be filed at such
time subsequent to the submittal of the initial report by telephone or
telegraph as may be directed by the Commission.

(2) The report shall be prepared in such detail
as may be appropriate to the severity and complexity of the incident
experienced and should include an account understandable to the informed layman
in addition to the following technical and other information:

(i) The cause or causes of the incident clearly
described, including the manner in which it was initiated.

(ii) A description of any operating conditions of an
unusual nature preceding the initiation of the incident.

(iii) If the incident was an interruption and
geographically widespread, an enumeration of the sequence of events
contributing to its spread.

(iv) An account of the measures taken which prevented
further spreading in the loss of service, e.g., manual or automatic load
shedding, unit isolation, or system sectionalization. These actions and all
chronicled events should be keyed to a record of the coincident frequencies which
occurred.

(v) A description of the measures taken to restore
service with particular evaluation of the availability of start up power and
the ease or difficulty of restoration.

(vi) A statement of the capacity of the transmission
lines into the area of load interruption, the generating capacity in operation
in the area at the beginning of the disturbance, and the actual loading on the
generating units and, where available, the loading on the lines at that time.
When actual loadings are not available, estimate the line loadings at the time
to the extent possible.

(vii) A summary description of any equipment damage and
the status of its repair.

(viii) A description of the impact of any load reduction
or interruption on people and industries in the affected area, including a copy
of materials in the printed news media indicative of the impact.

(ix) Information on the steps taken, being taken, or
planned by the utility, to prevent recurrence of conditions of a similar
nature, to ease problems of service restoration, and to minimize impacts on the
public and the customers of any future conditions of a similar nature.

(a) Purpose. The purpose of this Rule is to establish standards
for measuring and reporting distribution service reliability by electric public
utilities that own and operate electric power distribution systems in North
Carolina.

(c) Definitions. Unless otherwise provided for in this Rule,
all terms used are as defined by the Institute of Electrical and Electronics Engineers
(IEEE) in the most current IEEE Guide for Electric Power Distribution Reliability
Indices 1366 (IEEE Standard 1366).

(d) Quarterly Reports.

(1) Each electric public utility shall report service
reliability data to the Commission on a quarterly basis. The data reported shall
be submitted within 30 days of the end of each quarter and shall reflect SAIDI and
SAIFI results for the preceding 12 months.

(2) SAIDI and SAIFI shall be calculated in accordance
with IEEE Standard 1366.

(3) The reports shall include: SAIDI, with and
without Major Event Days, and SAIFI, with and without Major Event Days.

(4) Interruptions reported shall include all sustained
interruptions, except those for Major Event Days.

(a) All certificated public electric utility companies,
electric membership corporations and municipal corporations engaged in the
generation, transmission or distribution of electric energy, shall design and
adopt a set of load-reducing plans and emergency procedures that will provide
judicious treatment to all affected customers in the event that emergency load
reduction is required, provided that compliance with the requirements of this
subsection by any municipal corporation shall be voluntary. Furthermore, the
plans and procedures of each such electric supplier or participating municipal
corporation shall be coordinated with the plans and procedures of its natural
gas suppliers, natural gas distribution utilities, gas pipelines, wholesale
suppliers and/or wholesale-for-resale customers to the extent reasonably
practicable.

(b) A detailed copy of emergency load reduction plans and
emergency procedures in effect shall be filed by each electric supplier or
municipal corporation in the office of the Commission in Docket No. E-100, Sub
10A and shall be updated annually not later than May 15. Each filing shall
contain a certification that such plans and procedures have been coordinated
with the electric utilities' natural gas suppliers, natural gas distribution
utilities, and gas pipelines, as well as wholesale power suppliers or
wholesale-for-resale customers as applicable.

(c) In its annual filing, each electric public utility and
electric membership corporation shall include a verified statement by an
officer stating that: (1) the utility had identified all the gas-electric
dependencies and inter-dependencies that could threaten electric operations or
customer service during extreme cold weather or other emergencies; (2) the
electric utility had discussed those dependencies and inter-dependencies with
the appropriate gas utility(ies) and pipeline(s); (3) the electric utility had,
in cooperation with the gas utility(ies) and/or pipeline(s), established a plan
for managing the dependencies and inter-dependencies during extreme cold
weather events and other emergencies; and (4) the electric utility had within the
last 12 months demonstrated its ability to start its black start generators
from a cold shutdown state during cold weather.

R08-44 METHOD OF
ADJUSTMENT FOR RATES VARYING FROM SCHEDULE OR FOR OTHER BILLING ERRORS

If it is found that a utility has directly or indirectly, by
any device whatsoever, charged, demanded, collected or received from any
consumer a greater or less compensation for any service rendered or to be
rendered by such utility than that prescribed in the schedules of such utility
applicable thereto then filed in the manner provided in Chapter 62 of the North
Carolina General Statutes; or if it is found that any consumer has received or
accepted any service from a utility for a compensation greater or less than
that prescribed in such schedules; or if, for any reason, billing error has
resulted in a greater or lesser charge than that incurred by the consumer for
the actual service rendered, then the method of adjustment for such overcharge
or undercharge shall be as provided by the following:

(1) If the utility has willfully overcharged any
consumer, then the method of adjustment shall be as provided in G.S. 62-139(b).

(2) If the utility has inadvertently overcharged a
consumer as a result of a misapplied schedule, an error in reading the meter, a
skipped meter reading, or any other human, machine, or meter error, the utility
shall at the customer's option, refund the excess amount paid by that consumer
or credit the amount billed as provided by the following:

a. If the interval during which the consumer
was overcharged can be determined, then the utility shall credit or refund the
excess amount charged during that entire interval provided that the applicable
statute of limitations shall not be exceeded.

b. If the interval during which the consumer
was overcharged cannot be determined, then the utility shall credit or refund
the excess amount charged during the 12 month period preceding the date when the
billing error was discovered.

c. If the exact usage and/or demand incurred
by that consumer during the billing periods subject to adjustment cannot be
determined, then the refund shall be based on an appropriate estimated usage
and/or demand.

d. If an overcharged consumer owes a past due
electric balance for the same type of service on which an overcharge occurred,
the utility may deduct the past due amount from any refund or credit.

(3) If the utility has undercharged any consumer as the
consequence of a fraudulent or willfully misleading action on that consumer's
part, or any such action by any person other than the employees or agents of
the company, such as tampering with, or bypassing the meter where it is evident
that such tampering or bypassing occurred during the residency of that
consumer, or if it is evident that a consumer has knowledge of being
undercharged without notifying the utility as such the utility shall recover
the deficient amount as provided by the following:

a. If the interval during which the consumer
was undercharged can be determined, then the utility shall collect the
deficient amount incurred during that entire interval, provided that the
applicable statute of limitations is not exceeded.

b. If the interval during which the consumer
was undercharged cannot be determined, then the utility shall collect the
deficient amount incurred during the 12 month period preceding the date when
the billing error was discovered by the utility.

c. If the usage and/or demand incurred by that
consumer during the billing periods subject to adjustment cannot be determined,
then the adjustment shall be based on an appropriate estimated usage and/or
demand.

(4) If the utility has undercharged any consumer as the
result of a misapplied schedule, an error in reading the meter, a skipped meter
reading, or any other human, machine, or meter error, except as provided in (3)
above, then the utility shall recover the deficient amount as provided by the
following:

a. If the interval during which a consumer having
a demand of less than 50kW was undercharged can be determined, then the utility
may collect the deficient amount incurred during that entire interval up to a
maximum period of 150 days. For a consumer having a demand of 50 kW or greater,
the maximum period shall be 12 months.

b. If the interval during which a consumer was
undercharged cannot be determined, then the utility may collect the deficient
amount incurred during the 150 day period preceding the date when the billing
error was discovered by the utility. For a consumer having a demand of 50 kW or
greater, the maximum period shall be 12 months.

c. If the usage and/or demand incurred by that
person during the billing periods subject to adjustment cannot be determined,
then the adjustment shall be based on an appropriate estimated usage and/or
demand.

d. The consumer shall be allowed to pay the
deficient amount, in equal installments added to the regular monthly bills,
over the same number of billing periods which occurred during the interval the
customer was subject to pay the deficient amount.

(5) This rule shall not be construed as to prohibit
equal payment plans, wherein the charge for each billing period is the
estimated total annual bill divided by the number of billing periods prescribed
by the plan, and the difference between the actual and estimated annual bill is
settled by one payment at the end of the year. However, incorrect billing under
equal payment plans shall be subject to this rule.

(6) This rule shall not be construed as to prohibit the
estimation of a consumer's usage for billing purposes when it is not feasible
to read the consumer's meter on a particular occasion.

(7) If the meter error is found upon test to be not
more than 2% fast or slow, the utility shall not be required to make a billing
adjustment under (2) above or allowed to make a billing adjustment under (4)
above.

(a) Utilities are urged to investigate new, more efficient
lighting systems as they are developed and, where such systems are efficient
and economical to the consumer, to request approval of newer systems as
standard tariff items.

(b) Luminaires with less than 33,000 lamp lumens

(1) When new lighting systems of less than
33,000 lamp lumens are offered, at least one unit must be offered in each of
the following standard lumen ranges before offerings may be made in other
ranges.

STANDARD RANGES

(Nominal Lamp Lumen
Ratings)

Area Lighting Street
Lighting

6,000 - 8,700
6,000 - 8,700

20,000 - 30,000 10,000
- 14,500

19,000 - 25,000

(2) If a standard unit of the new type is not
available in a lumen output range required in R8‑47(b)(1), the standard unit
most closely meeting the lumen requirements of that range may be substituted.

(3) The lumen ranges required for street
lighting by R8‑47(b)(1) are based upon the light distributions on roadway
and sidewalk areas resulting from the refractive characteristics of standard
mercury vapor and high pressure sodium vapor point source luminaires. In order
to qualify as meeting Rule R8‑47(b)(1), luminaire systems with other
light distributions will require a corresponding adjustment of lamp lumen
levels in order to equal the roadway and sidewalk illumination from these
standard luminaires.

(c) Luminaires with 33,000 or more lamp lumens - New
lighting systems may be offered in 33,000 lumen or larger size without being
offered in the standard ranges required by Rule R8‑47(b).

(d) As newer, more efficient types of lighting sources
become available and in substantial or predominant use, utilities will not be
required to continue to offer the older, less efficient types of lighting for
new service. Upon approval of the Commission, one or more sizes of the older
types may be removed at one time from the schedule of offerings.

(a) Each utility shall provide to each of its new consumers
within sixty (60) days after commencement of service a clear and concise
explanation of the rate schedule(s) applicable to such consumer. This can be
accomplished in one of the following manners at the option of the utility:

(1) A description of the rate schedules,
special clauses, and riders which are reasonably available to the consumer with
respect to the customer's particular rate classification or usage pattern
(e.g., residential, small commercial, general service, large power).

(2) A copy of applicable rate schedules or
similar documents on file with the Commission which contain such information.

(3) A combination of items (1) and (2) above to
inform the customer of rate schedules available to that particular service.

(4) The information stated in (1) and (2) above
may also be provided to a new consumer prior to commencement of service at the
utility's option if such is normally provided in the course of routine service
negotiation.

(5) In addition to the above, each new consumer
is to be furnished either a summary description of the current procedures
whereby the utility, pursuant to provisions of G.S. 62-134(e), is permitted to
increase or decrease its rates based solely upon the cost of fuel used in
generation or production of power, or a copy of the Commission rule setting
forth such procedures.

(b) Each utility is encouraged, but is not required, to
furnish the following information to each new consumer at the time that it
provides the information required to be provided by subparagraph (a) of this
rule:

(1) an explanation of its policies and rules
with respect to consumer credit;

(2) an explanation of its policies and
practices with respect to meter reading and billing cycles;

(3) an explanation of its service termination
and reconnect procedures;

(4) general company information concerning
reporting power failures, billing information, requests for service changes,
and the like; and

(5) energy conservation tips and load
management information.

(c) Nothing in this rule shall be construed to conflict
with the provisions of Rule R8-25(a) or to negate the duty of the utility to
supply any information to a consumer upon request as provided in that rule.

(a) Unless otherwise ordered by the Commission, each
utility that files an application with the Commission seeking to change its
rate tariffs, excluding adjustments of base rates for fuel costs, shall publish
notice of such application in the local news media within thirty (30) days of
the date of the Commission's order requiring such notice to be filed relative
to the subject application. In addition, each utility will provide a bill
insert notifying its consumers of such application within sixty (60) days of
the Commission's order. The form of such notices will be supplied to the
utility by the Commission and will normally contain the following information:

(1) a description of the overall amount of the
increase applied for in terms of dollars and in terms of percentage increase
over current levels, and any proposed changes in tariff designs or tariff
availability clauses;

(2) a brief comparison of present versus
proposed billings for the major rate categories for specified usage levels;

(3) a schedule of times, dates, and locations
of public hearings to be held with respect to the application;

(4) a schedule of filing deadlines for persons
interested in intervening in the case and a reference to Commission rules
specifying the procedures for intervening;

(5) a specification of a location where
interested parties can review the documentation filed in support of the rate
application and where copies of the proposed rate tariffs and pleadings filed
in the case can be obtained by the general public; and

(6) any other information deemed appropriate by
the Commission with regard to the utility's application.

(NCUC Docket No. E‑100, Sub 36, 1/5/81.)

R8‑50 NOTIFICATION OF AVAILABLE RATE SCHEDULES
AND BREAKDOWN OF

COMPANY OPERATING EXPENSES

(a) At least once each calendar year, each electric utility
shall notify its consumers of the rate schedules that are available within the
rate classification in which such consumer falls. Such notice should contain
brief summaries of all rate schedules within a consumer's rate classification.
In addition, the notice shall contain a statement that "Complete Rate
Schedules are available upon request." Each utility shall annually notify
the Commission of the completion date of this notification.

(b) Each electric utility shall annually provide to each of
its consumers a breakdown of its operating expenses for the most recent
available twelve (12) month period expressed as a percent of each dollar of
revenue. This information may be communicated graphically as part of a regular
bill insert, or if the utility does not include inserts with its bills, in a
special mailing.

(NCUC Docket No. E‑100, Sub 36, 1/5/81.)

R08-51 PROVISION OF PAST BILLING HISTORY UPON CONSUMER REQUEST

Each utility, upon the request of one of its consumers,
shall provide the past billing information of such consumer as provided in this
rule. The minimum information which shall be provided shall include the
following in an easily understood format: the name of the rate schedule under
which such consumer is served; a clear specification of the months and years of
data supplied (twelve month minimum); and a clear itemization of the demand
billing units, basic facilities charge, kilowatt-hour usage, and dollar amount
of bills for each bill rendered during the period to which the data relates.
The utility may charge up to $5.00 for all subsequent requests for a past
billing history made by the same consumer for the same service location within
a twelve (12) month period.

(a) On or before the 15th day of each month, each electric
public utility which uses fossil and/or nuclear fuel in the generation of
electric power for providing North Carolina retail electric service shall file
a Fuel Report for the second preceding month (i.e., up to 45 days after the end
of the month being reported) for review by the Commission, the Public Staff,
and any other interested party. The Monthly Fuel Report shall be filed in such
formats as shall from time to time be approved by the Commission, and shall
include the following information:

(7) Details of transactions for purchases,
sales, and interchanges of power, including (i) total delivered noncapacity
related costs of purchases that are subject to economic dispatch or economic
curtailment and (ii) capacity costs associated with purchases from qualifying
cogeneration facilities and qualifying small power production facilities, as
defined in 16 U.S.C. 796, that are subject to economic dispatch;

(8) Details of the total delivered costs of
purchases of power from renewable energy facilities and new renewable energy
facilities pursuant to G.S. 62‑133.8 and costs incurred to comply with
any federal mandate that is similar to subsections (b), (d), (e), and (f) of
G.S. 62‑133.8;

(9) Details of the fuel cost component of other
purchased power;

(10) Details of net gains or losses resulting
from sales of fuel or other fuel-related costs components as defined in G.S. 62‑133.2(a1);

(11) Details of net gains or losses resulting
from sales of by-products produced in the generation process to the extent the
costs of the inputs leading to that by-product are costs of fuel or fuel‑related
costs as defined in G.S. 62‑133.2(a1); and

(12) Details of costs incurred to comply with the
Swine Farm Methane Capture Pilot Program established in Section 4 of S.L.
2007-523.

Subdivisions (6) and (7)(ii) of
this subsection do not apply to the Monthly Fuel Report of an electric public utility
that is subject to G.S. 62‑133.2(a3).

(b) Each electric public utility which uses fossil and/or
nuclear fuel in the generation of electric power shall file a Fuel Procurement
Practices Report for review by the Commission at least once every ten (10)
years, plus each time the utility's fuel procurement practices change. The Fuel
Procurement Practices Report shall detail:

(1) The process and/or methodology the utility
uses to determine its fuel and fuel-related needs;

(2) The process the utility uses to determine
from which vendor it shall buy fuel and fuel-related inventories; and

(3) The inventory management practices the
utility follows to maintain its fuel and fuel-related inventories.

(a) On or before the last day of each month, every public
utility which uses fossil and/or nuclear fuel in the generation of electric
power for providing North Carolina retail electric service shall file a Base
Load Power Plant Performance Report for the preceding month for review by the
Commission, the Public Staff, and any other interested party.

(b) The monthly Base Load Power Plant Performance Report
shall list each outage during the period for each fossil and/or nuclear generating
unit designated herein.

(1) The outage information shall include the
following:

(i) Generating unit affected by outage;

(ii) Date(s) of each outage;

(iii) Duration of each outage;

(iv) Cause of each outage;

(v) Explanation for cause of outage, if known;

(vi) Remedial action to prevent recurrence of outage, if
any; and

(vii) Classification of outage as forced or scheduled.

(2) The outage information shall be provided
for each unit at the following generating plants:

(c) The monthly Base Load Power Plant Performance Report
shall provide summaries of the generation by each fossil and/or nuclear
generation unit designated herein, with one summary for the reporting month and
another summary for the 12-month period ending with the reporting month.

(4) The total delivered noncapacity related
costs, including all related transmission charges, of all purchases of electric
power by the electric public utility that are subject to economic dispatch or
economic curtailment.

(5) The capacity costs associated with all
purchases of electric power from qualifying cogeneration facilities and
qualifying small power production facilities, as defined in 16 U.S.C. 796, that
are subject to economic dispatch by the electric public utility.

(6) Except for those costs recovered pursuant
to G.S. 62-133.8(h), the total delivered costs of all purchases of power from
renewable energy facilities and new renewable energy facilities pursuant to
G.S. 62-133.8 or to comply with any federal mandate that is similar to the
requirements of subsections (b), (d), (e) and (f) of G.S. 62-133.8.

(7) All costs incurred to comply with the Swine
Farm Methane Capture Pilot Program established in Section 4 of S.L. 2007-523.

(8) The fuel cost component of other purchased
power.

Cost of fuel and fuel-related costs shall be adjusted for
(a) any net gains or losses resulting from any sales by the electric public
utility of fuel and other fuel-related costs components and (b) any net gains
or losses resulting from any sales by the electric public utility of by-products
produced in the generation process to the extent the costs of the inputs
leading to that by-product are costs of fuel or fuel-related costs.

(b) For each electric public utility generating electric
power by means of fossil and/or nuclear fuel for the purpose of furnishing
North Carolina retail electric service, the Commission shall schedule an annual
public hearing pursuant to G.S. 62-133.2(b) in order to review changes in the
electric public utility's cost of fuel and fuel-related costs. The annual cost
of fuel and fuel-related cost adjustment hearing for Duke Energy Carolinas,
LLC, will be scheduled for the first Tuesday of June each year; for Duke Energy
Progress, Inc., the annual hearing will be scheduled for the third Tuesday of
September each year; and for Virginia Electric and Power Company, d/b/a
Dominion North Carolina Power, the annual hearing will be scheduled for the
second Tuesday of November each year.

(c) The test periods for the hearings to be held pursuant
to paragraph (b) above will be uniform over time. The test period for Duke
Energy Carolinas, LLC will be the calendar year; for Duke Energy Progress,
Inc., the test period will be the 12-month period ending March 31; and for
Dominion North Carolina Power, the test period will be the 12-month period
ending June 30.

(d) The Commission shall permit each electric public
utility to charge an increment or decrement as a rider to its rates for changes
in the cost of fuel and fuel-related costs used in providing its North Carolina
customers with electricity from the cost of fuel and fuel-related costs
established in the electric public utility's previous general rate case on the
basis of cost per kilowatt-hour. The increment or decrement may be different
among customer classes. The general methodology and procedures to be used in
establishing the cost of fuel and fuel-related costs shall be as follows:

(1) Cost of fuel and fuel-related costs will be
preliminarily established utilizing the methods and procedures approved in the
utility's last general rate case, except that capacity factors for nuclear
production facilities will be normalized based generally on the national
average for nuclear production facilities as reflected in the most recent North
American Electric Reliability Corporation's Generating Availability Report,
adjusted to reflect unique, inherent characteristics of the utility, including,
but not limited to, plants 2 years or less in age and unusual events. The
national average capacity factor for nuclear production facilities shall be
based on the most recent 5-year period available and shall be weighted, if
appropriate, for both pressurized water reactors and boiling water reactors.
The costs shall be allocated among customer classes in accordance with G.S. 62-133.2(a2),
as applicable. A cost of fuel and fuel-related cost rider will then be
determined based upon the difference between the cost of fuel and fuel-related
costs thus established and the base cost of fuel and fuel-related cost
component of the rates established in the utility's most recent general rate
case. The foregoing normalization requirement assumes that the Commission finds
that an abnormality having a probable impact on the utility's revenues and
expenses existed during the test period.

(2) Cost of fuel and fuel-related costs will be
modified as provided in G.S. 62-133.2(a3).

(3) The cost of fuel and fuel-related costs as
described above will be further modified through use of an experience
modification factor (EMF) rider, which may be different among customer classes.
The EMF rider will reflect the difference between reasonable and prudently
incurred cost of fuel and fuel-related costs and the fuel-related revenues that
were actually realized during the test period under the cost of fuel and
fuel-related cost components of rates then in effect. Upon request of the electric
public utility, the Commission shall also incorporate in this determination the
experienced over-recovery or under-recovery of the cost of fuel and
fuel-related costs up to thirty (30) days prior to the date of the hearing,
provided that the reasonableness and prudence of these costs shall be subject
to review in the utility's next annual fuel and fuel-related costs adjustment
hearing.

(4) The cost of fuel and fuel-related cost
rider and the EMF rider as described hereinabove will be charged as an increment
or decrement to the base fuel cost component of rates established in the
electric public utility's previous general rate case.

(5) The EMF rider will remain in effect for a
fixed 12-month period following establishment and will carry through as a rider
to rates established in any intervening general rate case proceedings;
provided, however, that such carry-through provision will not relieve the
Commission of its responsibility to determine the reasonableness of the cost of
fuel and fuel-related costs, other than that being collected through operation
of the EMF rider, in any intervening general rate case proceeding.

(6) Pursuant to G.S. 62-130(e), any
over-collection of reasonable and prudently incurred cost of fuel and
fuel-related costs to be refunded to a utility's customers through operation of
the EMF rider shall include an amount of interest, at such rate as the
Commission determines to be just and reasonable, not to exceed the maximum
statutory rate.

(e) Each electric public utility, at a minimum, shall
submit to the Commission for purposes of investigation and hearing the
information and data in the form and detail as set forth below:

(1) Actual test period kWh sales, peak demand
by customer class, fuel-related revenues, and fuel-related expenses for the
utility's total system and for its North Carolina retail operations.

(2) Test period kWh sales normalized for
weather, customer growth and usage. Said normalized kWh sales shall be for the
utility's total system and for its North Carolina retail operations. The
methodology used for such normalization shall be the same methodology adopted
by the Commission, if any, in the utility's last general rate case.

(3) Adjusted test period kWh generation
corresponding to normalized test period kWh usage. The methodology for such
adjustment shall be the same methodology adopted by the Commission in the
utility's last general rate case, including adjustment by type of generation;
i.e., nuclear, fossil, hydro, pumped storage, purchased power, etc. In the event
that said methodology is inconsistent with the normalization methodology set
forth in paragraph (d)(1) above, additional pro forma calculations shall be
presented incorporating the normalization methodology reflected in paragraph
(d)(1).

(4) Cost of fuel and applicable fuel-related
costs corresponding to the adjusted test period kWh generation, including a
detailed explanation showing how such cost of fuel and fuel-related costs were
derived. The cost of fuel shall be based on end-of-period unit fuel prices
incurred during the test period, although the Commission may consider other
fuel prices if test period fuel prices are demonstrated to be nonrepresentative
on an on-going basis. Unit fuel prices shall include delivered fuel prices and
burned fuel expense rates as appropriate.

(6) The cost of fuel burned and of ammonia,
lime, limestone, urea, dibasic acid, sorbents, and catalysts consumed in
reducing or treating emissions at each generating facility.

(7) Any net gains or losses resulting from any
sales by the electric public utility of fuel or other fuel-related costs
components.

(8) Any net gains or losses resulting from any
sales by the electric public utility of by-products produced in the generation
process to the extent the costs of the inputs leading to that by-product are
costs of fuel or fuel-related costs.

(9) All costs incurred to comply with the Swine
Farm Methane Capture Pilot Program established in Section 4 of S.L. 2007-523.

(10) The monthly fuel report and the monthly base
load power plant performance report for the last month in the test period and
any information required by Rules R8-52 and R8-53 for the test period which has
not already been filed with the Commission. Further, such information for the
complete 12-month test period shall be provided by the electric public utility
to any intervenor upon request.

(11) All workpapers supporting the calculations,
adjustments and normalizations described above.

(12) The nuclear capacity rating(s) in the last
rate case and the rating(s) proposed in this proceeding. If they differ,
supporting justification for the change in nuclear capacity rating(s) since the
last rate case.

(13) The proposed rate design to recover the
electric public utility's cost of fuel and fuel-related costs.

An electric public utility that is subject to G.S. 62-133.2(a3)
is required to provide only the applicable information prescribed by
subdivisions (5), (6) and (8) of this subsection.

(f) The electric public utility shall file the information
required under this rule, accompanied by workpapers and direct testimony and
exhibits of expert witnesses supporting the information filed herein, and any
changes in rates proposed by the electric public utility (if any), according to
the following schedule: Duke Energy Carolinas, LLC, and Duke Energy Progress,
Inc., not less than 90 days prior to the hearing; Dominion North Carolina
Power, not less than 75 days prior to the hearing. Nothing in this rule shall
be construed to require the electric public utility to propose a change in
rates or to utilize any particular methodology to calculate any change in rates
proposed by the utility in this proceeding.

(g) The electric public utility shall publish a notice for
two (2) successive weeks in a newspaper or newspapers having general
circulation in its service area, normally beginning at least 30 days prior to the
hearing, notifying the public of the hearing before the Commission pursuant to
G.S. 62-133.2(b) and setting forth the time and place of the hearing.

(h) Persons having an interest in said hearing may file a
petition to intervene setting forth such interest at least 15 days prior to the
date of the hearing. Petitions to intervene filed less than 15 days prior to
the date of the hearing may be allowed in the discretion of the Commission for
good cause shown.

(i) The Public Staff and other intervenors shall file
direct testimony and exhibits of expert witnesses at least 15 days prior to the
hearing date. If a petition to intervene is filed less than 15 days prior to
the hearing date, it shall be accompanied by any direct testimony and exhibits
of expert witnesses the intervenor intends to offer at the hearing.

(j) The electric public utility may file rebuttal testimony
and exhibits of expert witnesses no later than 5 days prior to the hearing
date.

(k) The burden of proof as to the correctness and reasonableness
of any charge and as to whether the test year cost of fuel and fuel-related
costs were reasonable and prudently incurred shall be on the utility. For purposes
of determining the EMF rider, a utility must achieve either (a) an actual
system-wide nuclear capacity factor in the test year that is at least equal to
the national average capacity factor for nuclear production facilities based on
the most recent 5-year period available as reflected in the most recent North American
Electric Reliability Corporation's Generating Availability Report,
appropriately weighted for size and type of plant or (b) an average system-wide
nuclear capacity factor, based upon a two-year simple average of the
system-wide capacity factors actually experienced in the test year and the
preceding year, that is at least equal to the national average capacity factor
for nuclear production facilities based on the most recent 5-year period
available as reflected in the most recent North American Electric Reliability
Corporation's Generating Availability Report, appropriately weighted for size
and type of plant, or a presumption will be created that the utility incurred
the increased cost of fuel and fuel-related costs resulting therefrom
imprudently and that disallowance thereof is appropriate. The utility shall
have the opportunity to rebut this presumption at the hearing and to prove that
its test year cost of fuel and fuel-related costs were reasonable and prudently
incurred. To the extent that the utility rebuts the presumption by the
preponderance of the evidence, no disallowance will result.

(l) The hearing will generally be held in the Hearing Room
of the Commission at its offices in Raleigh, North Carolina.

(m) Each electric public utility shall follow deferred
accounting with respect to the difference between actual reasonable and
prudently incurred cost of fuel and fuel-related costs and cost of fuel and
fuel-related costs recovered under rates in effect.

(n) If the Commission has not issued an order pursuant to
G.S. 62-133.2 within 180 days after the date the electric public utility has
filed any proposed changes in its rates and charges in this proceeding based
solely on the cost of fuel and fuel-related costs, then the utility may place
such proposed changes into effect. If such changes in the rates and charges are
finally determined to be excessive, the electric public utility shall refund
any excess plus interest to its customers in a manner directed by the
Commission.

(a) Purpose. – The purpose of this rule is to establish
guidelines for the reporting of information regarding a utility's smart grid technology
plan in addition to that required in Rule R8-60(i)(10). The information
included should describe the conceptual structure and overall organization and
impact of the utility’s smart grid plans and provide details about the smart
grid technologies being evaluated, designed, or implemented.

(b) Smart Grid Technology Plan. – By October 1, 2014, and
every two years thereafter, each utility subject to Commission Rule
R8-60(i)(10) shall file with the Commission its biennial smart grid technology
plan. By October 1 of each year in which the biennial smart grid technology
plan is not required to be filed, each utility shall file with the Commission a
smart grid technology update report that includes significant amendments or
revisions to its biennial smart grid technology plan.

(c) Biennial Smart Grid Technology Plan Contents -- For
purposes of this Rule, smart grid technologies are as set forth in
Rule R8-60(i)(10) and shall also include those that provide real-time,
automated, interactive technologies that enable the optimization and/or
operation of consumer devices and appliances, including metering of customer
usage and providing customers with options to control their energy consumption.

The plan shall include all of the following:

(1) A summary of the utility's strategy for
evaluating and developing smart grid technologies.

(2) A description of how the proposed smart
grid technology plan will improve reliability and security of the grid.

(3) For all smart grid technologies currently
being deployed or scheduled for implementation within the next five years:

(i) A description of the technologies including the
goals and objectives of each technology, options for ensuring interoperability
of the technology with the legacy system, and the expected life of the
technology.

(ii) The status and timeframe for completion.

(iii) A description of any existing equipment to be
rendered obsolete by the new technology, its anticipated book value at time of
retirement, alternative uses of the existing equipment, and the expected
salvage value of the existing equipment.

(iv) A description of how the utility intends the
technology to transfer information between it and the customer while
maintaining the security of that information.

(v) A description of how third parties will implement
or utilize any portion of the technology, including transfers of
customer-specific information from the utility to third parties, and how
customers will authorize that information for release by the utility to third
parties.

(vi) Approximate timing and amount of capital
expenditures, including those already incurred.

(vii) Analyses relied upon by the utility for
installations, including an explanation of the methodology and inputs used to
perform the analyses.

(4) For all smart grid technologies actively
under consideration for implementation within the next five years, the smart
grid technology plan shall include a description of the technologies, including
the goals and objectives of the technologies, as well as a descriptive summary
of any completed analysis used by the utility in assessing the smart grid
technology.

(5) For each pilot project or initiative
currently underway or planned within the next two years to evaluate smart grid
technologies:

(i) A description, including its objective and an
explanation of how it will improve grid performance or provide improved or
additional utility goods and services.

(ii) The status and timeframe for completion.

(iii) The total cost incurred to date by the utility to
conduct and investigate each pilot project or initiative, including whether and
to what extent these projects are or will be funded by government grants.

(iv) A summary of the results of any pilot project or
initiative that is completed if the final results of the pilot project or
initiative have not yet been included in previous plans.

(v) An explanation of how the results of the pilot
project or initiative will be used by the utility if the explanation has not
yet been included in previous plans.

(6) A description of each project or initiative
described in a previous plan that is no longer under consideration by the
utility, and the basis for the decision to end consideration of each project or
initiative.

(7) For automated metering infrastructure
(AMI), in addition to the information required in subsections (3) or (4) of
this section, as appropriate, the utility shall also provide:

(i) A table indicating the extent to which AMI meters
have been installed in the utility's service territory and specifically in
North Carolina, the North Carolina jurisdictional customer classes and/or
tariffs of customers with AMI, and the predicted lifespans of these
installations. This table should indicate the number of AMI meters that has
been installed both cumulatively and since the filing of the last smart grid
technology plan.

(ii) The number of meters in North Carolina that use
traditional metering technology and/or automated meter reading (AMR)
technology, and the predicted lifespans for these installations.

(iii) Any adjustment made by the utility to its capital
accounting due to AMI, including the dollar amount of write-downs of its meter
inventories.

(iv) A discussion of what AMI services or functions are
currently being utilized, as well as any plans for implementing other AMI
services or functions within the next two years.

(d) Review of Plans and Update Reports.

(1) Within 30 days after the filing of each
utility's biennial smart grid technology plan, the Public Staff or any other
intervenor may file comments on any or all of the plans. Within 14 days after
the filing of initial comments, the parties may file reply comments addressing
any substantive or procedural issues raised by any other party. The Commission
may schedule smart grid technology plan presentations by the utilities. A
hearing to address issues raised by the Public Staff or any other intervenors
may be scheduled at the discretion of the Commission. The scope of the hearing
shall be limited to issues as identified by the Commission.

(2) Within 30 days of the filing of each utility's
smart grid technology update report, the Public Staff shall report to the
Commission whether each utility's update report meets the filing requirements
of this rule. The Commission may schedule smart grid technology plan update
presentations by the utilities.

(3) Any acceptance of a smart grid technology
plan or update report shall not constitute an approval of the recovery of costs
or of any specific technology or program associated with the plan.

(c) Integrated Resource Plan. — Each utility shall develop
and keep current an integrated resource plan, which incorporates, at a minimum,
the following:

(1) a 15-year forecast of native load
requirements (including any off-system obligations approved for native load
treatment by the Commission) and other system capacity or firm energy
obligations extending through at least one summer or winter peak (other system
obligations); supply-side (including owned/leased generation capacity and firm
purchased power arrangements) and demand-side resources expected to satisfy
those loads; and the reserve margin thus produced; and

(2) a comprehensive analysis of all resource
options (supply-and demand-side) considered by the utility for satisfaction of
native load requirements and other system obligations over the planning period,
including those resources chosen by the utility to provide reliable electric
utility service at least cost over the planning period.

Each utility shall include an assessment of demand‑side management and energy
efficiency in its integrated resource plan. G.S. 62‑133.9(c). In
addition, each utility's consideration of supply-side and demand-side
resources, including alternative supply-side energy resources, and the
provision of reliable electric utility service at least cost shall
appropriately consider and incorporate the utility's obligation to comply with
the Renewable Energy and Energy Efficiency Portfolio Standard (REPS). G.S. 62‑133.8.

(d) Purchased Power. — As part of its integrated resource
planning process, each utility shall assess on an on-going basis the potential
benefits of soliciting proposals from wholesale power suppliers and power
marketers to supply it with needed capacity.

(f) Demand-Side Management. — As part of its integrated
resource planning process, each utility shall assess on an on-going basis
programs to promote demand-side management, including costs, benefits, risks,
uncertainties, reliability and customer acceptance, where appropriate. For
purposes of this rule, demand-side management consists of demand response
programs and energy efficiency and conservation programs.

(g) Evaluation of Resource Options. — As part of its
integrated resource planning process, each utility shall consider and compare a
comprehensive set of potential resource options, including both demand-side and
supply-side options, to determine an integrated resource plan that offers the
least cost combination (on a long-term basis) of reliable resource options for
meeting the anticipated needs of its system. The utility shall analyze
potential resource options and combinations of resource options to serve its
system needs, taking into account the sensitivity of its analysis to variations
in future estimates of peak load, energy requirements, and other significant
assumptions, including, but not limited to, the risks associated with wholesale
markets, fuel costs, construction/implementation costs, transmission and
distribution costs, and costs of complying with environmental regulation.
Additionally, the utility's analysis should take into account, as applicable,
system operations, environmental impacts, and other qualitative factors.

(h) Filings.

(1) By
September 1, 2008, and every two years thereafter, each utility subject to this
rule shall file with the Commission its then current integrated resource plan,
together with all information required by subsection (i) of this rule. This
biennial report shall cover the next succeeding two-year period.

(2) By
September 1 of each year in which a biennial report is not required to be
filed, an update report shall be filed with the Commission containing an
updated 15-year forecast of the items described in subparagraph (c)(1), as well
as a summary of any significant amendments or revisions to the most recently
filed biennial report, including amendments or revisions to the type and size
of resources identified, as applicable.

(3) Each
biennial and update report filed shall be accompanied by a short-term action
plan that discusses those specific actions currently being taken by the utility
to implement the activities chosen as appropriate per the applicable biennial
and update reports.

(5) If a
utility considers certain information in its biennial or update report to be
proprietary, confidential, and within the scope of G.S. 132-1.2, the utility
may designate the information as "confidential" and file it under
seal.

(i) Contents of Biennial Reports. — Each utility shall
include in each biennial report the following:

(1) Forecasts
of Load, Supply-Side Resources, and Demand-Side Resources. The forecasts filed
by each utility as part of its biennial report shall include descriptions of
the methods, models, and assumptions used by the utility to prepare its peak
load (MW) and energy sales (MWh) forecasts and the variables used in the
models. In the biennial reports, the forecasts filed by each utility shall
include, at a minimum, the following:

(i) The most
recent ten-year history and a forecast of customers by each customer class, the
most recent ten-year history and a forecast of energy sales (MWh) by each
customer class, and the most recent ten-year history and a forecast of the
utility’s summer and winter peak load (MW);

(ii) A
tabulation of the utility's forecast for at least a 15-year period, including
peak loads for summer and winter seasons of each year, annual energy forecasts,
reserve margins, and load duration curves, with and without projected supply or
demand-side resource additions. The tabulation shall also indicate the projected
effects of demand response and energy efficiency programs and activities on the
forecasted annual energy and peak loads on an annual basis for a 15‑year
period, and these effects also may be reported as an equivalent generation
capacity impact; and

(iii) Where
future supply-side resources are required, a description of the type of
capacity/resource (MW rating, fuel source, base, intermediate, or peaking) that
the utility proposes to use to address the forecasted need.

(2) Generating
Facilities. — Each utility shall provide the following data for its existing
and planned electric generating facilities (including planned additions and
retirements, but excluding cogeneration and small power production):

(i) Existing
Generation. — The utility shall provide a list of existing units in service,
with the information specified below for each listed unit. The information
shall be provided for a 15-year period beginning with the year of filing:

a. Type of
fuel(s) used;

b. Type of
unit (e.g., base, intermediate, or peaking);

c. Location of
each existing unit;

d. A list of
units to be retired from service with location, capacity and expected date of
retirement from the system;

e. A list of
units for which there are specific plans for life extension, refurbishment or
upgrading. The reporting utility shall also provide the expected (or actual)
date removed from service, general location, capacity rating upon return to
service, expected return to service date, and a general description of work to
be performed; and

f. Other
changes to existing generating units that are expected to increase or decrease
generation capability of the unit in question by an amount that is plus or
minus 10%, or 10 MW, whichever is greater.

(ii) Planned
Generation Additions. — Each utility shall provide a list of planned generation
additions, the rationale as to why each listed generation addition was
selected, and a 15-year projection of the following for each listed addition:

a. Type of
fuel(s) used;

b. Type of unit (e.g. MW rating, baseload, intermediate,
peaking);

c. Location of
each planned unit to the extent such location has been determined; and

d. Summaries
of the analyses supporting any new generation additions included in its 15-year
forecast, including its designation as base, intermediate, or peaking capacity.

(iii) Non-Utility
Generation. — Each utility shall provide a separate and updated list of all
non-utility electric generating facilities in its service areas, including
customer-owned and stand-by generating facilities. This list shall include the
facility name, location, primary fuel type, and capacity (including its
designation as base, intermediate, or peaking capacity). The utility shall also
indicate which facilities are included in its total supply of resources. If any
of this information is readily accessible in documents already filed with the
Commission, the utility may incorporate by reference the document or documents
in its report, so long as the utility provides the docket number and the date
of filing.

(3) Reserve
Margins. — The utility shall provide a calculation and analysis of its winter
and summer peak reserve margins over the projected 15-year period. To the
extent the margins produced in a given year differ from target reserve margins
by plus or minus 3%, the utility shall explain the reasons for the difference.

(4) Wholesale
Contracts for the Purchase and Sale of Power.

(i) The utility
shall provide a list of firm wholesale purchased power contracts reflected in
the biennial report, including the primary fuel type, capacity (including its
designation as base, intermediate, or peaking capacity), location, expiration
date, and volume of purchases actually made since the last biennial report for
each contract.

(ii) The utility
shall discuss the results of any Request for Proposals (RFP) for purchased
power it has issued since its last biennial report. This discussion shall
include a description of each RFP, the number of entities responding to the
RFP, the number of proposals received, the terms of the proposals, and an explanation
of why the proposals were accepted or rejected.

(iii) The utility
shall include a list of the wholesale power sales contracts for the sale of
capacity or firm energy for which the utility has committed to sell power
during the planning horizon, the identity of each wholesale entity to which the
utility has committed itself to sell power during the planning horizon, the
number of megawatts (MW) on an annual basis for each contract, the length of
each contract, and the type of each contract (e.g., native load priority, firm,
etc.).

(5) Transmission
Facilities. — Each utility shall include a list of transmission lines and other
associated facilities (161 kV or over) which are under construction or for
which there are specific plans to be constructed during the planning horizon,
including the capacity and voltage levels, location, and schedules for
completion and operation. The utility shall also include a discussion of the
adequacy of its transmission system (161 kV and above).

(6) Demand-Side
Management. — Each utility shall provide the results of its overall assessment
of existing and potential demand-side management programs, including a
descriptive summary of each analysis performed or used by the utility in the
assessment. The utility also shall provide general information on any changes
to the methods and assumptions used in the assessment since its last biennial
report.

(i) For
demand-side programs available at the time of the report, the utility shall
provide the following information for each resource: the type of resource
(demand response or energy efficiency); the capacity and energy available in
the program; number of customers enrolled in each program; the number of times
the utility has called upon the resource; and, where applicable, the capacity
reduction realized each time since the previous biennial report. The utility
shall also list any demand-side resource it has discontinued since its previous
biennial report and the reasons for that discontinuance.

(ii) For
demand-side management programs it proposes to implement within the biennium
for which the report is filed, the utility shall provide the following
information for each resource: the type of resource (demand response and energy
efficiency); a description of the new program and the target customer segment;
the capacity and energy expected to be available from the program; projected
customer acceptance; the date the program will be launched; and the rationale
as to why the program was selected.

(iii) For programs
evaluated but rejected the utility shall provide the following information for
each resource considered: the type of resource (demand response or energy
efficiency); a description of the program and the target customer segment; the
capacity and energy available from the program; projected customer acceptance;
and reasons for the program's rejection.

(iv) For consumer
education programs the utility shall provide a comprehensive list of all such
programs the utility currently provides to its customers, or proposes to
implement within the biennium for which the report is filed, including a
description of the program, the target customer segment, and the utility’s
promotion of the education program. The utility shall also provide a list of
any educational program it has discontinued since its last biennial report and
the reasons for discontinuance.

(7) Assessment
of Alternative Supply-Side Energy Resources. — The utility shall include its
current overall assessment of existing and potential alternative supply-side
energy resources, including a descriptive summary of each analysis performed or
used by the utility in the assessment. The utility shall also provide general
information on any changes to the methods and assumptions used in the
assessment since its most recent biennial or update report.

(i) For the
currently operational or potential future alternative supply-side energy resources
included in each utility's plan, the utility shall provide information on the
capacity and energy actually available or projected to be available, as
applicable, from the resource. The utility shall also provide this information
for any actual or potential alternative supply‑side energy resources that
have been discontinued from its plan since its last biennial report and the
reasons for that discontinuance.

(ii) For
alternative supply-side energy resources evaluated but rejected, the utility
shall provide the following information for each resource considered: a
description of the resource; the potential capacity and energy associated with
the resource; and the reasons for the rejection of the resource.

(8) Evaluation
of Resource Options. — Each utility shall provide a description and a summary
of the results of its analyses of potential resource options and combinations
of resource options performed by it pursuant to subsection (g) of this rule to
determine its integrated resource plan.

(i) For purposes
of this requirement, the term "smart" in smart grid means a system
having the ability to receive, process, and send information and/or data –
essentially establishing a two-way communication protocol.

(ii) For purposes
of this requirement, smart grid technologies that are implemented in a smart
grid deployment plan may include those that:

a. utilize digital information and controls technology
to improve the reliability, security and efficiency of an electric utility's
distribution or transmission system;

d. provide utility operators with data concerning
the operations and status of the distribution and/or transmission system, as
well as automating some operations; or

e. provide customers with usage information or
retail energy pricing information in order to allow them to interpret and adjust their energy consumption.

(iii) The
information provided shall include:

a. A
description of the technology installed and for which installation is scheduled
to begin in the next five years and the resulting and projected net impacts
from installation of that technology, including, if applicable, the potential
demand (MW) and energy (MWh) savings resulting from the described technology.

b. A
comparison to "gross" MW and MWh without installation of the
described smart grid technology.

c. A
description of MW and MWh impacts on a system, North Carolina retail
jurisdictional, and North Carolina retail customer class basis, including
proposed plans for measurement and verification of customer impacts or actual
measurement and verification of customer impacts.

(j) Contents of Update Reports. — In addition to the
information required by sections (h)(2)-(4) of this rule, each utility shall
include in its update report data and tables that provide the following data
for the planning horizon: (1) the information required by sections (i)(1) and
(2) of this rule, including the utility's load forecast adjusted for the
impacts of any new energy efficiency programs, existing generating capacity
with planned additions, uprates, derates, and retirements, planned purchase
contracts, undesignated future resources identified by type of generation and
MW rating, renewable capacity, demand-side management capacity, and any
resource gap; (2) cumulative resource additions necessary to meet load
obligation and reserve margins; and (3) projections of load, capacity, and
reserves for both the summer and winter periods. A total system IRP may be
filed in lieu of an update report for purposes of compliance with this section.

(k) Review of Biennial Reports. — Within 150 days after the
later of either September 1 or the filing of each utility's biennial
report, the Public Staff or any other intervenor may file an integrated resource
plan or report of its own as to any utility or may file an evaluation of or
comments on the reports filed by the utilities, or both. The Public Staff or
any intervenor may identify any issue that it believes should be the subject of
an evidentiary hearing. Within 60 days after the filing of initial comments,
the parties may file reply comments addressing any substantive or procedural
issue raised by any other party. A hearing to address issues raised by the
Public Staff or other intervenors may be scheduled at the discretion of the
Commission. The scope of any such hearing shall be limited to such issues as
identified by the Commission. One or more hearings to receive testimony from
the public, as required by law, shall be set at a time and place designated by
the Commission.

(l) Review of Update Reports. — Within 60 days after the
filing of each utility's update report required by section (j) of this rule,
the Public Staff or any other intervenor may file an update report of its own
as to any utility. Further, within the same time period the Public Staff shall
report to the Commission whether each utility's update report meets the
requirements of this rule. Intervenors may request leave from the Commission to
file comments. Comments will be received or expert witness hearings held on the
update reports only if the Commission deems it necessary. The scope of any
comments or expert witness hearing shall be limited to issues identified by the
Commission. One or more hearings to receive testimony from the public, as
required by law, shall be set at a time and place designated by the Commission.

(m) By November 30 of each year, each utility individually
or jointly shall hold a meeting to review its biennial or update report with
interested parties.

R8-61 PRELIMINARY
PLANS AND CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY FOR CONSTRUCTION OF
ELECTRIC GENERATION AND RELATED TRANSMISSION FACILITIES IN NORTH CAROLINA;
CONSTRUCTION OF OUT‑OF‑STATE ELECTRIC GENERATING FACILITIES;
PROGRESS REPORTS AND ONGOING REVIEWS OF CONSTRUCTION; PROJECT DEVELOPMENT COST
REVIEWS FOR NUCLEAR GENERATING FACILITIES.

(a) A public utility or other person that plans to build an
electricity generating facility with a nameplate capacity of 300 megawatts
(alternating current) or more shall file with the Commission and the Department
of the Environment and Natural Resources its preliminary plans at least 120
days before filing an application for a certificate of public convenience and
necessity. The preliminary plans shall include the following exhibits:

(1) Exhibit 1 shall contain the following site
information:

(i) A color map or aerial photo (a U.S. Geological
Survey map or an aerial photo map prepared via the State's geographic
information system is preferred) showing the proposed site boundary and layout,
with all major equipment, including the generator, fuel handling equipment,
plant distribution system, startup equipment, planned and existing pipelines,
planned and existing roads, planned and existing water supplies, and planned
and existing electric facilities;

(ii) The E911 street address, county in which the
proposed facility would be located, and GPS coordinates of the approximate
center of the proposed facility site to the nearest second or one thousandth of
a degree;

(iii) The full and correct name of the site owner and,
if the owner is other than the applicant, the applicant's interest in the site;

(iv) Justification for the adoption of the site selected,
and general information describing the other locations considered;

(vi) A description of investigations completed, in
progress, or proposed involving the subject site;

(vii) A statement of existing or proposed plans known to
the applicant of federal, state, local governmental and private entities for
other developments at or adjacent to the proposed site;

(viii) In the case of natural gas-fired facilities, a map
showing the proximity of the facility to existing natural gas facilities; a
description of dedicated gas facilities to be constructed to serve the
facility; and any filed agreements, service contracts, or tariffs for interstate
pipeline capacity;

(ix) A brief general description of practicable
transmission line routes emanating from the site, including a color map showing
their general location; and

(x) The gross, net, and nameplate generating capacity
of each unit and the entire facility’s total projected dependable capacity in
alternating current (AC).

(2) Exhibit 2 shall contain the following
permitting information:

(i) A list of all agencies from which approvals will
be sought covering various aspects of any generation facility constructed on
the site and the title and nature of such approvals; and

(ii) A statement of existing or proposed environmental
evaluation programs to meet the applicable air and water quality standards.

(3) Exhibit 3 shall include a schedule showing
the anticipated beginning dates for construction, testing, and commercial
operation of the generating facility.

(b) In filing an application for a certificate of public
convenience and necessity pursuant to G.S. 62‑110.1(a) in order to
construct a generating facility in North Carolina, a public utility shall
include the following exhibits supported by relevant testimony:

(i) The utility's most recent biennial report and the
most recent annual report filed pursuant to Rule R8‑60, plus any
proposals by the utility to update said reports;

(ii) The extent to which the proposed facility would
conform to the utility's most recent biennial report and the most recent annual
report that was filed pursuant to Rule R8‑60;

(iii) A statement of how the facility would contribute
to resource and fuel diversity, whether the facility would have dual-fuel
capability, and how much fuel would be stored at the site.

(iv) An explanation of the need for the facility,
including information on energy and capacity forecasts; and

(v) An explanation of how the proposed facility meets
the identified energy and capacity needs, including the anticipated facility
capacity factor, heat rate, and service life.

(2) Exhibit 2 shall contain the siting and
permitting information as listed in Rule R8‑61(a), with updates as
necessary for facilities that are 300 megawatts (alternating current) nameplate
capacity or more, and for which this information had already been filed.

(3) Exhibit 3 shall contain the following cost
information for the proposed facility, and for the final alternatives that the
applicant considered:

(i) An estimate of the construction costs for the
generating facility, including the costs for new substation(s) and transmission
line(s), and upgrades to existing substations(s) and transmission lines(s). For
nuclear plants, construction costs shall include the plant’s first core fuel
load;

(v) The projected cost of each major component of the
generating facility and the projected schedule for incurring those costs;

(vi) The projected effect of investment in the
generating facility on the utility’s overall revenue requirement for each year
during the construction period;

(vii) The anticipated in-service expenses associated with
the generating facility for the 12-month period of time following commencement
of commercial operation of the facility; and

(viii) The anticipated impact the facility will have on
customer rates.

(4) Exhibit 4 shall contain the following
construction information:

(i) The anticipated construction schedule for the
generating facility;

(ii) The specific type of units selected for the
generating facility; the suppliers of the major components of the facility; the
basis for selecting the type of units, major components, and suppliers; and
arrangements made or planned to assure a dependable fuel supply;

(iii) The qualifications and selection process of
principal contractors and suppliers for construction of the generating
facility, other than those listed in Item (ii) above; and

(iv) Risk factors related to the construction and
operation of the generating facility, including a verified statement as to
whether the facility will be capable of operating during the lowest temperature
that has been recorded in the area using information from the National Weather
Service Automated Surface Observing System (ASOS) First Order Station in
Asheville, Charlotte, Greensboro, Hatteras, Raleigh or Wilmington, depending
upon the station that is located closest to where the plant will be located.

(5) If the facility is a coal or nuclear-fueled
facility, the application shall include Exhibit 5, which shall contain
information demonstrating that energy efficiency measures; demand-side
management; renewable energy resource generation; combined heat and power
generation; or any combination thereof, would not establish or maintain a more
cost-effective and reliable generation system and that the construction and
operation of the facility is in the public interest.

(c) The public utility shall submit a progress report and
any revision in the construction cost estimate during each year of construction
according to a schedule established by the Commission.

(d) Upon the request of the public utility or upon the
Commission’s own motion, the Commission may conduct an ongoing review of
construction of the generating facility as the construction proceeds.

(e) A public utility requesting an ongoing review of
construction of the generating facility pursuant to G.S. 62‑110.1(f)
shall file an application, supported by relevant testimony, for an ongoing
review no later than 12 months after the date of issuance of a certificate of
public convenience and necessity by the Commission; provided, however, that the
public utility may, prior to the conclusion of such 12-month period, petition
the Commission for a reasonable extension of time to file an application based
on a showing of good cause. Upon the filing of a request for an ongoing review,
the Commission shall establish a schedule of hearings. The hearings shall be
held no more often than every 12 months. The Commission shall also establish
the time period to be reviewed during each hearing. The purpose of each ongoing
review hearing is to determine the reasonableness and prudence of the costs
incurred by the public utility during the period under review and to determine
whether the certificate should remain in effect or be modified or revoked. The
public utility shall have the burden of proof to demonstrate that all costs
incurred are reasonable and prudent.

(f) A public utility may file an application pursuant to
G.S. 62‑110.6 requesting the Commission to determine the need for an
out-of-state electric generating facility that is intended to serve retail
customers in North Carolina. If need for the generating facility is
established, the Commission shall also approve an estimate of the construction
costs and construction schedule for such facility. The application may be filed
at any time after an application for a certificate of public convenience and
necessity or license for construction of the generating facility has been filed
in the state in which the facility will be sited. The application shall be
supported by relevant testimony and shall include the information required by
subsection (b) of this Rule to the extent such information is relevant to the
showing of need for the generating facility and the estimated construction
costs and proposed construction schedule for the generating facility. The
public utility shall submit a progress report and any revision in the
construction cost estimate for the out-of-state electric generating facility
during each year of construction according to a schedule established by the
Commission.

(g) If the Commission makes a determination of need
pursuant to G.S. 62‑110.6 and subsection (f) of this Rule, the
provisions of subsections (d) and (e) of this Rule shall apply to a request by
a public utility for an ongoing review of construction of a generating facility
to be constructed in another state that is intended to serve retail customers
in North Carolina. An electric public utility shall file an application,
supported by relevant testimony, for an ongoing review no later than 12 months
after the date of issuance of a certificate of public convenience and necessity
or license by the state commission in which the out‑of-state generating
facility is to be constructed; provided, however, that the public utility may,
prior to the conclusion of such 12-month period, petition the Commission for a
reasonable extension of time to file an application based on a showing of good
cause.

(h) A public utility may file an application pursuant to
G.S. 62‑110.7 requesting the Commission to review the public
utility’s decision to incur project development costs for a potential in-state
or out-of-state nuclear generating facility that is intended to serve retail
electric customers in North Carolina. The application, supported by relevant
testimony, shall be filed prior to the filing of an application for a
certificate to construct the facility.

R8-62. Certificates
of environmental compatibility and public convenience and necessity for the
construction of electric transmission lines in North Carolina.

(a) Each public utility or person, prior to commencing
construction of a new transmission line for which a certificate is required
pursuant to G.S. 62-101, shall first obtain a certificate of environmental
compatibility and public convenience and necessity from the Commission. The
requirement for such certificate may be satisfied by an applicable certificate
granted by the Commission under G.S. 62-110 and Commission Rule R8-61.

(b) The procedures for the filing of an application for a
certificate shall be as specified in Commission Rule R1-5.

(c) The filing of an application for a certificate shall
include the following:

(1) The reasons the transmission line is needed
including when it is needed for the purpose described;

(2) A description of the proposed location of
the transmission line including a U.S. Geological Survey map showing the
proposed route and alternative routes evaluated in relation to appropriate
geographic reference points;

(3) A description of the proposed transmission
line including:

a. The facilities including structure type and their
average height range (as determined by preliminary engineering), the right of
way corridor including its width, the capacity and voltage level of the lines;
and operation and maintenance considerations.

b. A showing of the projected cost of the line.

(4) An environmental report setting forth:

a. The environmental impact of the proposed action
including, as appropriate, its effect on natural resources, cultural resources,
land use, and aesthetics;

b. Any proposed mitigating measures that may minimize
the environmental impact; and

c. Alternative routes for the proposed lines;

(5) A listing of residential, commercial,
industrial and institutional development; other man-made features; natural
features which influenced route selection and how they were considered in the
selection process; and

(6) A complete list of all federal and state
licenses, permits and exemptions required for construction and operation of the
transmission line and a statement of whether each has been obtained or applied
for. A copy of those that have been obtained should be filed with the
application; a copy of those that have not been obtained at the time of the
application should be filed with the Commission as soon as they are obtained.

(7) The application shall be accompanied by
prefiled direct testimony incorporating and supporting the application.
Provided, however, an applicant requesting a waiver of the notice and hearing
requirements pursuant to Rule R8-62(k) and G.S. 62-101(d)(1) shall not be
required to prefile direct testimony supporting the application unless the waiver
request is subsequently denied by the Commission.

(d) The applicant shall file a written summary with the
Commission explaining any proposed deviation from the approved certificate,
unless the deviation is insignificant. The Commission will, within thirty (30)
days, determine and notify the applicant if the deviation(s) will require the
Company to file an application for an amended certificate. If the Commission
determines that an amended certificate is necessary, the applicant shall,
giving consideration to the circumstances that created the deviation, file the
following:

(1) The reasons the amendment is needed;

(2) A brief description of the proposed
amendment;

(3) An amended environmental report, or
addendum to the report filed with the initial application, containing the
following information:

a. A U.S. Geological Survey Map showing the amended
route in relation to all routes reviewed by the Commission in the initial
application proceeding;

b. The right of way width and structures (structure
type, approximate average height range and approximate locations as determined
by preliminary engineering) along the amended route;

c. Revised project cost based on the proposed amended
route;

d. A description of any changes in environmental
impacts (either additional or reduced) of the proposed amended route,
including, as appropriate, its effect on natural and cultural resources, land
use and aesthetics; and

e. Any proposed mitigation measures specifically
proposed to reduce environmental impacts of the amended segment of the line.

(4) Notice for amending a certificate must be
given as provided in Rule R8-62(e).

(e) Within 10 days after the filing of the application or
application for amendment, the applicant shall serve a copy of the application
on the parties listed in G.S. 62-102(b) in the manner provided in G.S. 1A-1,
Rule 4. The copy of the application served on each party shall be accompanied
by a notice specifying the date on which the application was filed and giving
information on procedural steps to take and time deadlines to follow for
intervention.

(f) At the time of filing, the applicant shall file a
summary of the application to be used to fulfill the notice requirements of
this certificate. The summary shall contain, at a minimum the following:

(1) A summary of the proposed action;

(2) A description of the location of the
proposed transmission line written in readable style and the location of the
nearest business office to the proposed line where detailed maps (U.S.
Geological Survey Map, or equal) may be examined. Said maps to also be
available for review in the Commission's Office of the Chief Clerk;

(3) The date on which the application was
filed; and

(4) The date by which persons with substantial
interest in the certification proceeding must intervene.

The Commission shall, within 3 business days after the date
of the filing, notify the applicant of its approval or of any required changes
or additions to the summary.

(g) Within 10 days after the filing of the application, the
applicant shall give public notice to persons residing in each county and
municipality in which the proposed transmission line is to be located by
publishing the approved summary of the application in newspapers of general
circulation in the affected cities and counties so as to substantially inform
those persons of the filing of the application. This notice shall thereafter be
published in those newspapers a minimum of three additional times before the
time for parties to intervene has expired. The summary shall also be sent to
the North Carolina State Clearinghouse.

If the Commission orders public hearings on the application,
the applicant shall send a revised summary to the North Carolina State
Clearinghouse that states when and where the hearing will be held. In addition,
the applicant shall similarly revise the newspaper notice so that all published
notices following the first shall describe the schedule of public hearings.

(h) After the initial public notice and for the duration of
the proceeding, the applicant shall make a copy of the application available
for public review at its office(s) in proximity to the proposed transmission
line.

(i) Persons desiring to intervene and having a substantial
interest in this proceeding in accordance with G.S. 62-103(b) shall file a
petition with the Commission to intervene setting forth interest and basis for
intervention no later than 100 days after the date of the filing of the
application. A county or municipality shall comply with the requirements of
G.S. 62-106 with respect to filing with the Commission and serving on the
applicant the provisions of an ordinance that may affect the construction,
operation or maintenance of the proposed transmission line. Local ordinances
brought forward by municipalities or counties shall be presumed to be in the
public interest; however, the Commission may find that the greater public interest
requires preemption of the local ordinance.

(j) Testimony and exhibits by expert witnesses shall be
filed pursuant to Commission Rule R1-24(g). Absent substantial cause, the
Public Staff and other intervenors shall file direct testimony and exhibits of
expert witnesses no later than the deadline
established for filing petitions to intervene. Non-expert witness testimony
is not required to be reduced to writing or filed prior to the hearing.

(k) The applicant may request in writing, as a part of the
application, that the Commission waive the notice and hearing requirements. A
completed application and the waiver request shall be prefiled with the Public
Staff's Electric Division at least twenty (20) days before the application is
filed to allow for investigation of the request. At the same time the applicant
shall file a letter of intent to file for a waiver with the Commission. When
the application is subsequently filed, it shall be accompanied by a written
request for the waiver and a statement that the request has been prefiled as
required by this Rule. The applicant shall identify and describe any conditions
of the proposed transmission line which meets the waiver requirements set forth
in G.S. 62-101(d)(1). The Commission shall rule on this waiver within 30 days
after the date of the filing. A request to waive notice and hearing
requirements will automatically waive the notice requirements of G.S. 62-102(b)
and (c). If the Commission denies the request for a waiver, the applicant shall
serve notice within 10 days, as prescribed in Rule R8-62(e), from the date the
Commission serves notice of its decision.

(l) Pursuant to G.S. 62-101(d)(2), the applicant may
request that the Commission waive the notice and hearing requirements because
the urgency of providing electric service requires the immediate construction
of the transmission line. In making this decision the Commission shall
determine whether failure to build the line could result in unreliable or
insufficient electrical supply to the public. The Commission shall rule on this
request within 10 days of the application. If the Commission concurs, it shall
waive the notice and hearing requirements but shall give notice to those
parties listed in G.S. 62-102(b) and (c) before issuing a certificate or
approving an amendment.

(m) The procedures for seeking exemption pursuant to G.S.
62-101(c)(3) or (5) from the requirement of obtaining a certificate shall be as
follows:

(1) A public utility or person is not required
to obtain a certificate before beginning to construct a transmission line
referred to in either G.S. 62-101(c)(3) or (5) if the Federal Energy Regulatory
Commission (FERC) or the Rural Electrification Administration (REA), as
appropriate, has conducted a proceeding on the line that is substantially
equivalent to the proceeding required by Article 5A of G. S. Chapter 62.

(2) A public utility or person shall be exempt
from the requirement of a public hearing to obtain a certificate before
beginning to construct a transmission line referred to in either G.S.
62-101(c)(3) or (5), if the FERC or the REA, as appropriate, has conducted a
proceeding on the line that is substantially equivalent to the proceeding
required by Article 5A of G. S. Chapter 62.

(3) To apply for the exemption under section
(1) above, the public utility or person shall file the following information
with the Commission:

a. the location and transcript of each public
hearing;

b. the notices of hearing and a description of how
and to whom the notices were given;

c. a statement that the hearings were conducted in
conformity with the FERC or REA laws, as appropriate, and a general description
of what the applicable law requires; and

d. the final order of the FERC or the REA authorizing
the construction of the line.

(4) To apply for the exemption under section
(2) above, the public utility or person shall file the information required by
sections (3)a., b., and c. above.

(5) The Commission shall within five (5) days
of receipt of the application distribute copies of it to the Public Staff and
any other party that has previously requested it. In addition the Commission
shall promptly supply copies to any other parties who subsequently request
them.

(6) Within thirty (30) days from receipt of the
application, the Commission shall enter an order granting the applicable
exemption if it finds that the FERC or the REA has conducted a proceeding on
the line that is substantially equivalent to the hearing required by the
Commission's certification procedure under Article 5A of G. S. Chapter 62, and
with respect to the exemption provided under section (1) above, that the FERC
or the REA has issued a final order authorizing construction of the line.

(n) When justified by the public convenience and necessity
and a showing that circumstances require immediate action, the Commission may
permit an applicant for a certificate to proceed with initial clearing,
excavation, and construction before receiving the certificate required by G.S.
62-101. In so proceeding, however, the applicant acts at its own risk, and by
granting such permission, the Commission does not commit to ultimately grant a
certificate for the transmission line.

(o) If, after proper notice of the application has been
given, no significant protests are filed with the Commission the applicant may
request the Commission in writing, or the Commission on its own motion, may
cancel the hearing and decide the case on the filed record.

(p) Plans for the construction of transmission lines in North Carolina (161 kV and above) shall be incorporated in filings made pursuant to
Commission Rule R8-60. In addition, each public utility or person covered by
this rule shall provide the following information on an annual basis no later
than September 1:

(1) For existing lines, the information
required on FERC Form 1, pages 422, 423, 424, and 425, except that the
information reported on pages 422 and 423 may be reported every five years.

R8-63 Application
for certificate of public convenience and necessity for merchant plant;
progress reports.

(a) Scope of Rule.

(1) This rule applies to an application for a certificate
of public convenience and necessity pursuant to G.S. 62-110.1(a) by any person
seeking to construct a merchant plant in North Carolina.

(2) For purposes of this rule, the term
"merchant plant" means an electric generating facility, other than one
that qualifies for and seeks the benefits of 16 U.S.C.A. 824a-3 or G.S. 62-156,
the output of which will be sold exclusively at wholesale and the construction
cost of which does not qualify for inclusion in, and would not be considered in
a future determination of, the rate base of a public utility pursuant to G.S.
62-133.

(3) Persons filing under this rule are not
subject to the requirements of Rule R8-61 or R8-64.

(b) Application. The application shall contain the exhibits
listed below, which shall contain the information hereinafter required, with
each exhibit and item labeled as set out below. Any additional information may
be included at the end of the application.

(1) Exhibit 1 shall contain the following
information about the applicant:

(i) The full and correct name, business address,
business telephone number and electronic mailing address of the applicant;

(ii) A description of the applicant, including the
identities of its principal participant(s) and officers, and the name and
business address of a person authorized to act as corporate agent or to whom
correspondence should be directed;

(iii) A copy of the applicant's most recent annual
report to stockholders, which may be attached as an exhibit, or, if the
applicant is not publicly traded, its most recent balance sheet and income
statement. If the applicant is a newly formed entity with little history, this
information should be provided for its parent company, equity partner, and/or
the other participant(s) in the project; and

(iv) Information about generating facilities in the
Southeastern Electric Reliability Council region which the applicant or an
affiliate has any ownership interest in and/or the ability to control through
leases, contracts, options, and/or other arrangements and information about
certificates that have been granted for any such facilities not yet
constructed.

(2) Exhibit 2 shall contain the following
information about the proposed facility:

(i) The nature of the proposed generating facility,
including its type, fuel, expected service life, and the gross, net, and
nameplate generating capacity of each generating unit and the entire facility,
as well as the facility's total projected dependable capacity, in megawatts
(alternating current); the anticipated beginning date for construction; the
expected commercial operation date; and estimated construction costs;

(ii) A color map or aerial photo (a U.S. Geological
Survey map or aerial photo map prepared via the State's geographic information
system is preferred) showing the proposed site boundary and layout, with all
major equipment, including the generator, fuel handling equipment, plant
distribution system, startup equipment, planned and existing pipelines, planned
and existing roads, planned and existing water supplies, and planned and
existing electric facilities;

(iii) The E911 street address, county in which the
proposed facility would be located, and GPS coordinates of the approximate
center of the proposed facility site to the nearest second or one thousandth of
a degree.

(iv) In the case of natural gas-fired facilities, a map
showing the proximity of the facility to existing natural gas facilities; a
description of dedicated facilities to be constructed to serve the facility;
and any filed agreements, service contracts, or tariffs for interstate pipeline
capacity;

(v) A list of all needed federal, state, and local
approvals related to the facility and site, identified by title and the nature
of the needed approval; a copy of such approvals or a report of their status;
and a copy of any application related to eligible facility and/or exempt
wholesale generator status pursuant to Section 32 of the Public Utility Holding
Company Act of 1935 (PUHCA), as amended by the Energy Policy Act of 1992,
including attachments and subsequent amendments, if any; and

(vi) A general description of the transmission
facilities to which the facility will interconnect, and a color map showing
their general location. If additional facilities are needed, a statement
regarding whether the applicant would need to acquire rights-of-way for new
facilities.

(3) Exhibit 3 shall provide a description of
the need for the facility in the state and/or region, with supporting
documentation.

(4) The application shall be signed and
verified by the applicant or by an individual duly authorized to act on behalf
of the applicant.

(5) The application shall be accompanied by
pre-filed direct testimony incorporating and supporting the application.

(6) The Chief Clerk will deliver a copy of the
application to the Clearinghouse Coordinator in the Department of
Administration for distribution to State agencies having an interest in the
proposed generating facility.

(7) Contemporaneous with the filing of the
application with the Commission, all applicants proposing a generating facility
that will use natural gas must provide written notice of the filing to the
natural gas local distribution company or municipal gas system providing
service or franchised to provide service at the location of the proposed
generating facility.

(c) Confidential Information. If an applicant considers
certain of the required information to be confidential and entitled to
protection from public disclosure, it may designate said information as
confidential and file it under seal. Documents marked as confidential will be
treated pursuant to applicable Commission rules, procedures, and orders dealing
with filings made under seal and with nondisclosure agreements.

(d) Procedure upon Receipt of Application. No later than
ten (10) business days after the application is filed with the Commission, the
Public Staff shall, and any other party in interest may, file with the
Commission and serve upon the applicant a notice regarding whether the
application is complete and identifying any deficiencies. If the Commission
determines that the application is not complete, the applicant will be required
to file the missing information. Upon receipt of all required information, the
Commission will promptly issue a procedural order setting the matter for
hearing, requiring public notice, and dealing with other procedural matters.

(e) The Certificate.

(1) The certificate shall specify the name and
address of the certificate holder; the type, capacity, and location of the
facility; and the conditions, if any, upon which the certificate is granted.

(2) The certificate shall be subject to
revocation if (a) any of the federal, state, or local licenses or permits
required for construction and operation of the generating facility not obtained
or, having been obtained, are revoked pursuant to a final, non-appealable
order; (b) required reports or fees are not filed with or paid to the
Commission; and/or (c) the Commission concludes that the certificate holder
filed with the Commission information of a material nature that was inaccurate
and/or misleading at the time it was filed; provided that, prior to revocation
pursuant to any of the foregoing provisions, the certificate holder shall be
given thirty (30) days' written notice and opportunity to cure.

(3) The certificate must be renewed if the
applicant does not begin construction within three years after the date of the
Commission order granting the certificate.

(4) A certificate holder must notify the
Commission in writing of any plans to sell, transfer, or assign the certificate
and the generating facility.

(f) Reporting. All applicants must submit annual progress
reports and any revisions in cost estimates, as required by G.S. 62-110.1(f)
until construction is completed.

R8‑64 APPLICATION
FOR CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY BY CPRE PROGRAM
PARTICIPANT, QUALIFYING COGENERATOR, OR SMALL POWER PRODUCER; PROGRESS REPORTS.

(a) Scope of Rule.

(1) This rule applies to applications for a
certificate of public convenience and necessity pursuant to G.S. 62‑110.1(a)
filed by any person, other than an electric public utility, who is an owner of
a renewable energy facility that is participating in the Competitive
Procurement of Renewable Energy Program established in G.S. 62-110.8, or by any
person who is seeking the benefits of 16 U.S.C. 824a-3 or G.S. 62‑156 as
a qualifying cogenerator or a qualifying small power producer as defined in 16
U.S.C. 796(17) and (18), or as a small power producer as defined in G.S. 62‑3(27a),
except persons exempt from certification by the provisions of G.S. 62‑110.1(g).

(2) For purposes of this rule, the term
"person" shall include a municipality as defined in Rules R7-2(c) and
R10-2(c), including a county of the State.

(3) The construction of a facility for the
generation of electricity shall include not only the building of a new
building, structure or generator, but also the renovation or reworking of an
existing building, structure or generator in order to enable it to operate as a
generating facility.

(4) This rule shall apply to any person within
its scope who begins construction of an electric generating facility without
first obtaining a certificate of public convenience and necessity. In such
circumstances, the application shall include an explanation for the applicant's
beginning of construction before the obtaining of the certificate.

(b) The Application. The application shall be
comprised of the following five exhibits:

(1) Exhibit 1 shall contain:

(i) The full and correct name, business address,
business telephone number, and electronic mailing address of the facility
owner;

(ii) A statement of whether the facility owner is an
individual, a partnership, or a corporation and, if a partnership, the name and
business address of each general partner and, if a corporation, the state and
date of incorporation and the name, business address, business telephone
number, and electronic mailing address of an individual duly authorized to act
as corporate agent for the purpose of the application and, if a foreign
corporation, whether domesticated in North Carolina; and

(iii) The full and correct name of the site owner and,
if the owner is other than the applicant, the applicant's interest in the site.

(2) Exhibit 2 shall contain:

(i) A color map or aerial photo showing the location
of the generating facility site in relation to local highways, streets, rivers,
streams, and other generally known local landmarks, with the proposed location
of major equipment indicated on the map or photo, including: the generator,
fuel handling equipment, plant distribution system, startup equipment, the site
boundary, planned and existing pipelines, planned and existing roads, planned
and existing water supplies, and planned and existing electric facilities. A
U.S. Geological Survey map or an aerial photo map prepared via the State's
geographic information system is preferred; and

(ii) The E911 street address, county in which the
proposed facility would be located, and GPS coordinates of the approximate
center of the proposed facility site to the nearest second or one thousandth of
a degree.

(3) Exhibit 3 shall contain:

(i) The nature of the generating facility, including
the type and source of its power or fuel;

(ii) A description of the buildings, structures and
equipment comprising the generating facility and the manner of its operation;

(iii) The gross and net projected maximum dependable
capacity of the facility as well as the facility's nameplate capacity,
expressed as megawatts (alternating current);

(iv) The projected date on which the facility will come
on line;

(v) The applicant's general plan for sale of the
electricity to be generated, including the utility to which the applicant plans
to sell the electricity;

(vi) Any provisions for wheeling of the electricity, if
applicable;

(vii) Arrangements for firm, non-firm or emergency
generation, if applicable;

(viii) The service life of the project;

(ix) The projected annual sales in kilowatt-hours; and

(x) Whether the applicant intends to produce renewable
energy certificates that are eligible for compliance with the State's renewable
energy and energy efficiency portfolio standard.

(4) Exhibit 4 shall contain:

(i) A complete list of all federal and state licenses,
permits and exemptions required for construction and operation of the generating
facility and a statement of whether each has been obtained or applied for.

(ii) A copy of those that have been obtained should be
filed with the application; a copy of those that have not been obtained at the
time of the application should be filed with the Commission as soon
as they are obtained.

(6) An applicant who desires to enter into a
contract for 5 years or more for the sale of electricity, whose facility will
have a nameplate capacity of 5 megawatts alternating current or more, and whose
facility is not a solar photovoltaic facility, shall include the three
additional exhibits as described in R8‑64(b)(6)(i), (ii), and (iii)
below, except an applicant who desires to enter into a contract of 5 years or
more for the sale of electricity from a solar photovoltaic facility of 25
megawatts alternating current or more shall also include the three additional
exhibits referenced herein.

(i) Exhibit 6 shall contain:

a. A statement detailing the experience and
expertise of the persons who will develop, design, construct and operate the
project to the extent such persons are known at the time of the application;

b. Information specifically identifying the extent
to which any regulated utility will be involved in the actual operation of the
project; and

c. A statement obtained by the applicant from the
electric utility to which the applicant plans to sell the electricity to be
generated setting forth an assessment of the impact of such purchased power on
the utility's capacity, reserves, generation mix, capacity expansion plan, and
avoided costs.

(ii) Exhibit 7 shall contain:

a. The most current available balance sheet of the
applicant;

b. The most current available income statement of
the applicant;

c. An economic feasibility study of the project;
and

d. A statement of the actual financing
arrangements entered into in connection with the project to the extent known at
the time of the application.

(iii) Exhibit 8 shall contain:

a. A detailed explanation of the anticipated
kilowatt and kilowatt-hour outputs, on-peak and off-peak, for each month of the
year. The explanation shall include a statement of the specific on-peak and
off-peak hours underlying the applicant's quantification of anticipated
kilowatt and kilowatt-hour outputs;

b. A detailed explanation of all energy inputs and
outputs, of whatever form, for the project, including the amount of energy and
the form of energy to be sold to each purchaser; and

c. A detailed explanation of arrangements for fuel
supply, including the length of time covered by the arrangements, to the extent
known at the time of the application.

(7) All applications shall be signed and
verified by the applicant or by an individual duly authorized to act on behalf
of the applicant for the purpose of the application.

(8) Applications filed on behalf of a
corporation are not subject to the provision of R1‑5(d) that requires
corporate pleadings to be filed by a member of the Bar of the State of North
Carolina. Should a public hearing be required, the requirements of G.S. 84-4
and G.S. 84-4.1 shall be applicable.

(9) Falsification of or failure to disclose any
required information in the application may be grounds for denying or revoking
any certificate.

(10) The application and 12 copies shall be filed
with the Chief Clerk of the Utilities Commission.

(11) If an applicant considers certain of the
required information to be confidential and entitled to protection from public
disclosure, it may designate said information as confidential and file it under
seal. Documents marked as confidential will be treated pursuant to applicable
Commission rules, procedures, and orders dealing with filings made under seal
and with nondisclosure agreements.

(c) Procedure upon receipt of Application. — Upon
the filing of an application appearing to meet the requirements set forth
above, the Commission will process it as follows:

(1) The Commission will issue an order
requiring the applicant to publish notice of the application once a week for
four successive weeks in a newspaper of general circulation in the county where
the generating facility is proposed to be constructed and requiring the
applicant to mail a copy of the application and the notice, no later than the
first date that such notice is published, to the electric utility to which the
applicant plans to sell the electricity to be generated. Each electric utility
shall provide on its website a mailing address to which the application and
notice should be mailed. The applicant shall be responsible for filing with the
Commission an affidavit of publication and a signed and verified certificate of
service to the effect that the application and notice have been mailed to the
electric utility to which the applicant plans to sell the electricity to be
generated.

(2) If the applicant does not file the
affidavit of publication and certificate of service within twelve months of the
Commission's publication order, the Commission will automatically dismiss the
application.

(3) The Chief Clerk will deliver 2 copies of
the application and the notice to the Clearinghouse Coordinator of the Office
of Policy and Planning of the Department of Administration for distribution by
the Coordinator to State agencies having an interest in the application.

(4) If a complaint is received within 10 days
after the last date of the publication of the notice, the Commission will
schedule a public hearing to determine whether a certificate should be awarded
and will give reasonable notice of the time and place of the hearing to the
applicant and to each complaining party and will require the applicant to
publish notice of the hearing in the newspaper in which the notice of the
application was published. If no complaint is received within the time
specified, the Commission may, upon its own initiative, order and schedule a
hearing to determine whether a certificate should be awarded and, if the
Commission orders a hearing upon its own initiative, it will require notice of
the hearing to be published by the applicant in the newspaper in which the
notice of the application was published.

(5) If no complaint is received within the time
specified and the Commission does not order a hearing upon its own initiative,
the Commission will enter an order awarding the certificate.

(d) The Certificate.

(1) The certificate shall be subject to
revocation if any of the other federal or state licenses, permits or exemptions
required for construction and operation of the generating facility is not
obtained and that fact is brought to the attention of the Commission and the
Commission finds that as a result the public convenience and necessity no
longer requires, or will require, construction of the facility.

(2) The certificate must be renewed by
re-compliance with the requirements set forth in this Rule if the applicant
does not begin construction within 5 years after issuance of the certificate.

(3) Both before the time construction is completed
and after, all certificate holders must advise both the Commission and the
utility involved of any plans to sell, transfer, or assign the certificate or
the generating facility or of any significant changes in the information set
forth in subsections (b)(1) thru (b)(5) of this Rule, and the Commission will
order such proceedings as it deems appropriate to deal with such plans or
changes.

(a) All persons exempt from certification under
G.S. 62‑110.1(g) shall file with the Commission a report of the
proposed construction of an electric generating facility before beginning
construction of the facility. The report shall
include the information prescribed in subsection (g) below and shall be
signed and verified by the owner of the electric generating facility or by an
individual duly authorized to act on behalf of the owner for the purpose of the
filing.

(b) Reports filed on behalf of a corporation are not subject
to the provision of Rule R1‑5(d) that requires corporate pleadings to be
filed by a member of the Bar of the State of North Carolina. Should a public
hearing be required, the requirements of G.S. 84-4 and G.S. 84-4.1 shall be
applicable.

(c) The owner of the electric generating facility shall
provide a copy of the report to the electric public utility, electric
membership corporation, or municipality to which the generating facility will
be interconnected.

(d) The owner of the electric generating facility shall
file the report electronically or file an original and 6 copies of the report
of proposed construction with the Chief Clerk of the Utilities Commission. No
filing fee is required.

(e) Upon the filing of a report of proposed construction,
the Chief Clerk will assign a new docket or sub-docket number to the filing.

(f) The Commission may order a hearing on the report of
proposed construction upon its own motion or upon receipt of a complaint
specifying the basis thereof. Otherwise, no acknowledgment of receipt of the
report of proposed construction will be issued nor will any other further
action be taken by the Commission.

(g) The Report.

(1) The report shall be comprised of the
following four exhibits:

(i) Exhibit 1 shall contain:

a. The full and correct name, business address,
business telephone number, and electronic mailing address of the facility
owner;

b. A statement of whether the facility owner is an
individual, a partnership, or a corporation and, if a partnership, the name and
business address of each general partner and, if a corporation, the state and
date of incorporation and the name, business address, business telephone
number, and electronic mailing address of an individual duly authorized to act
as corporate agent for the purpose of the report and, if a foreign corporation,
whether domesticated in North Carolina; and

c. The full and correct name of the site owner
and, if the owner is other than the facility owner, the facility owner's
interest in the site.

(ii) Exhibit 2 shall contain:

a. A color map or aerial photo showing the
location of the generating facility site in relation to local highways,
streets, rivers, streams, and other generally known local landmarks; and

b. The E911 street address, county in which the
proposed facility will be physically located, and GPS coordinates of the
approximate center of the proposed facility site to the nearest second or one
thousandth of a degree.

(iii) Exhibit 3 shall contain:

a. The nature of the generating facility,
including the type and source of its power or fuel;

b. A description of the buildings, structures and
equipment comprising the generating facility and the manner of its operation;

c. The gross and net generating capacity of each
unit and the entire facility in alternating current (AC);

d. The projected date on which the facility will
come on line;

e. The facility owner's general plan for sale of
the electricity to be generated, including the utility to which the facility
owner plans to sell the electricity;

f. the service life of the project;

g. the projected annual sales in kilowatt-hours;
and

h. whether the facility owner intends to produce
renewable energy certificates that are eligible for compliance with the State’s
renewable energy and energy efficiency portfolio standard.

(2) All reports shall be signed and verified by
the facility owner or by an individual duly authorized to act on behalf of the
facility owner for the purpose of the report.

(3) Falsification of or failure to disclose any
required information in the report may be grounds for rejecting the report.

(4) Both before the time construction is
completed and after, all facility owners must advise both the Commission and
the utility involved of any plans to sell, transfer, or assign the generating
facility or of any significant changes in the information set forth in
subsection (g) of this Rule.

(a) The following terms shall be defined as provided in
G.S. 62-133.8: "electric power supplier"; "renewable energy
certificate"; and "renewable energy facility."

(b) The owner, including an electric power supplier, of
each renewable energy facility, whether or not required to obtain a certificate
of public convenience and necessity pursuant to G.S. 62-110.1, that intends for
renewable energy certificates it earns to be eligible for use by an electric
power supplier to comply with G.S. 62-133.8, or for its facility to participate
in the Competitive Procurement of Renewable Energy Program, shall register the
facility with the Commission. The registration statement may be filed
separately or together with an application for a certificate of public
convenience and necessity, or with a report of proposed construction by a
person exempt from the certification requirement. All relevant renewable energy
facilities shall be registered prior to their having RECs issued in the North
Carolina Renewable Energy Tracking System (NC-RETS) pursuant to Rule R8-67(h).
Contracts for power supplied by an agency of the federal government are exempt
from the requirement to register and file annually with the Commission if the
renewable energy certificates associated with the power are bundled with the
power purchased by the electric power supplier.

(1) The owner of each renewable energy facility
that has not previously done so, including a facility that is located outside
of the State of North Carolina, shall include in its registration statement the
following information:

(i) The full and correct name, business address,
electronic mailing address, and telephone number of the facility owner;

(ii) A statement of whether the facility owner is an
individual, a partnership, or a corporation and, if a partnership, the name and
business address of each general partner and, if a corporation, the state and
date of incorporation and the name, business telephone number, electronic
mailing address, and business address, of an individual duly authorized to act
as corporate agent for the purpose of the application and, if a foreign
corporation, whether domesticated in North Carolina;

(iii) The nature of the renewable energy facility,
including its technology, the type and source of its power or fuel(s); whether
it produces electricity, useful thermal energy, or both; and the facility's
projected dependable capacity in kilowatts AC and/or British thermal units per
hour, as well as its maximum nameplate capacity;

(iv) The E911 address of the facility, the county in
which the proposed facility will be physically located, and GPS coordinates of
the approximate center of the proposed facility site to the nearest second or
one thousandth of a degree;

(v) A map, such as a county road map, with the location
indicated on the map;

(vi) The ownership of the site and, if the site owner is
other than the facility owner, the facility owner's legal interest in the site;

(vii) A complete list of all federal and state (not
local) licenses, permits, and exemptions required for construction and
operation of the facility, and a statement of whether each has been obtained or
applied for. A copy of those that have been obtained should be filed with the
application. Wind facilities with multiple turbines, where each turbine is
licensed separately, may provide copies of such approvals for one such turbine
of each type in the facility, but shall attest that approvals for all of the
turbines are available for inspection;

(viii) The date the facility began operating. If the
facility is not yet operating, the owner shall provide the facility's projected
in-service date;

(ix) If the facility is already operating, the owner
shall provide information regarding the amount of energy produced by the
facility, net of station use, for the most recent 12-month or calendar-year
period. Energy production data for a shorter time period is acceptable for
facilities that have not yet operated for a full year;

(x) The name of the entity that does (or will) read the
facility's energy production meter(s) for the purpose of renewable energy
certificate issuance;

(xi) For thermal energy facilities, describe the method
to be used to determine the facility's thermal energy production, in Btus per
hour, that is eligible for REC issuance;

(xii) Whether the facility participates in a REC tracking
system, and if so, which one. If the facility does not currently participate in
a REC tracking system, which tracking system the owner anticipates will be used
for the purpose of REC issuance; and

(xiii) If this facility has already been the subject of a
proceeding or submittal before the Commission, such as a Report of Proposed
Construction or a Certificate of Public Convenience and Necessity, provide the
Commission Docket Number, if available.

(2) If the facility is a combined heat and
power system, the owner shall also include in its registration statement the
following information:

(i) A narrative description and one-line diagram of
the electrical and thermal generation systems to include Btu meters, boilers,
steam pressures, valves, turbines, and ultimate uses of the steam. Also,
include any crossover of steam, cross connections (even if by spool piece), or
the ability to supply steam from other means or to other loads;

(ii) A description of the parasitic electrical and
parasitic thermal loads;

(iii) Calculations for the parasitic electrical and
parasitic thermal loads and supporting documents;

(iv) A description of the method of collecting the waste
heat from the electrical generating system;

(v) A description of the host(s) of the waste heat and
an explanation of how the waste heat will be used and useful;

(vi) Calculations of the percent of energy that is
delivered to the steam host(s) but not used and useful; and

(vii) Confirmation if the proposed operation will have
any pressure reducing valves operating simultaneously in parallel with any back
pressure turbines.

(3) If the facility owner intends to earn
multiple types of RECs by using a variety of fuels, the owner shall include in
its registration statement the following additional information:

(i) Example calculations for the energy production
associated with each fuel used by the facility as required by the Appendix C
(Multi‑fuel Generation) to the operating procedures for the North
Carolina Renewable Energy Tracking System. These calculations must ultimately
show the electrical and thermal energy (if any) attributable to only the
renewable fuels and how the number of renewable energy certificates is
determined;

(ii) A description of each fuel to be used by the
facility; and

(iii) A description of how the heat content of each fuel
was determined.

(4) The owner of each renewable energy facility
shall certify in its registration statement and annually thereafter that it is
in substantial compliance with all federal and state laws, regulations, and
rules for the protection of the environment and conservation of natural
resources. If a credible showing is made that the facility is not in
substantial compliance with all federal and state laws, regulations, and rules
for the protection of the environment and conservation of natural resources,
the Commission shall refer the matter to the appropriate environmental agency
for review. Registration shall not be revoked unless and until the appropriate
environmental agency concludes that the facility is out of compliance and the
Commission issues an order revoking the registration.

(5) The owner of each renewable energy facility
shall certify in its registration statement and annually thereafter that the
facility satisfies the requirements of G.S. 62‑133.8(a)(5) or (7) as a
renewable energy facility or new renewable energy facility, that the facility
will be operated as a renewable energy facility or new renewable energy
facility, and, if the facility has been placed into service, the date when it
was placed into service

(6) The owner of each renewable energy facility
shall further certify in its registration statement and annually thereafter
that any renewable energy certificates (whether or not bundled with electric
power) sold to an electric power supplier to comply with G.S. 62-133.8 have
not, and will not, be remarketed or otherwise resold for any other purpose,
including another renewable energy portfolio standard or voluntary purchase of
renewable energy certificates in North Carolina (such as NC GreenPower) or any
other state or country, and that the electric power associated with the
certificates will not be offered or sold with any representation that the power
is bundled with renewable energy certificates.

(7) The owner of each renewable energy facility
shall certify in its registration statement and annually thereafter that it
consents to the auditing of its books and records by the Public Staff insofar
as those records relate to transactions with North Carolina electric power
suppliers, and agrees to provide the Public Staff and the Commission access to
its books and records, wherever they are located, and to the facility.

(8) If the facility is already operating, the
owner shall attest that the registration information is true and accurate for
all years that the facility has earned RECs for compliance with G.S. 62-133.8.
Each registration statement shall be signed and verified by the owner of the
renewable energy facility or by an individual duly authorized to act on behalf
of the owner for the purpose of the filing.

(9) Renewable energy facilities and new renewable
energy facilities that have RECs issued in NC-RETS shall provide their annual
certification electronically via NC-RETS. Annual certifications are due April 1
each year.

(10) Registration statements filed on behalf of a
corporation are not subject to the provision of Rule R1-5(d) that requires
corporate pleadings to be filed by a member of the Bar of the State of North
Carolina. Should a public hearing be required, the requirements of G.S. 84-4
and G.S. 84-4.1 shall be applicable.

(11) The applicant may file the registration
statement electronically or by filing an original and 9 copies of the
registration statement with the Chief Clerk of the Utilities Commission. No
filing fee is required to be submitted with the registration statement.

(c) Each re-seller of renewable energy certificates derived
from a renewable energy facility, including a facility that is located outside
of the State of North Carolina, shall ensure that the owner of the renewable
energy facility registers with the Commission prior to the sale of the
certificates by the re-seller to an electric power supplier to comply with G.S.
62-133.8(b), (c), (d), (e) and (f), except that the filing requirements in
subsection (b) of this Rule shall apply only to information for the year(s)
corresponding to the year(s) in which the certificates to be sold were earned.

(d) Upon receipt of a registration statement, the Chief
Clerk will assign a new docket or sub-docket number to the filing.

(e) No later than twenty (20) business days after the
registration statement is filed with the Commission, the Public Staff shall,
and any other interested persons may, file with the Commission and serve upon
the registrant a recommendation regarding whether the registration statement is
complete and identifying any deficiencies. If the Commission determines that
the registration statement is not complete, the owner of the renewable energy
facility will be required to file the missing information. Upon receipt of all
required information, the Commission will promptly issue an order accepting the
registration, denying the registration, or setting the matter for hearing.

(f) Any of the following actions may result in revocation
of registration by the Commission:

(1) Falsification of or failure to disclose any
required information in the registration statement or annual filing;

(2) Failure to remain in substantial compliance
with all federal and state laws, regulations, and rules for the protection of
the environment and conservation of natural resources;

(3) Remarketing or reselling any renewable
energy certificate (whether or not bundled with electric power) after it has
been sold to an electric power supplier or any other person for compliance with
G.S. 62-133.8 or for any other purpose, including another renewable energy
portfolio standard or voluntary purchase of renewable energy certificates in
North Carolina or any other state or country, or offering or selling the
electric power associated with the certificates with any representation that
the power is bundled with renewable energy certificates;

(4) Failure to allow the Commission or the
Public Staff access to its books and records necessary to audit REPS
compliance; or

(g) NC-RETS shall maintain on its website a list of all
registration statement revocations.

(h) An owner of a renewable energy facility that has
registered with the Commission shall notify the Commission and the tracking
system that issues the facility's RECs within fifteen (15) days of any material
change in status, including ownership change, fuel change, or permit issuance
or revocation. An owner of a renewable energy facility shall also notify the
Commission if it wants to withdraw its registration.

(2) For purposes of determining an electric power
supplier's avoided costs, "avoided cost rates" mean an electric power
supplier's most recently approved or established avoided cost rates in this
state, as of the date the contract is executed, for purchases of electricity
from qualifying facilities pursuant to Section 210 of the Public Utility
Regulatory Policies Act of 1978. If the Commission has approved an avoided cost
rate for the electric power supplier for the year when the contract is
executed, applicable to contracts of the same nature and duration as the
contract between the electric power supplier and the seller, that rate shall be
used as the avoided cost. Therefore, for example, for a contract by an electric
public utility with a term of 15 years, the avoided cost rate applicable to
that contract would be the comparable, Commission-approved, 15-year, long-term,
levelized rate in effect at the time the contract was executed. In all other
cases, the avoided cost shall be a good faith estimate of the electric power
supplier's avoided cost, levelized over the duration of the contract,
determined as of the date the contract is executed, taking into consideration
the avoided cost rates then in effect as established by the Commission. In any
event, when found by the Commission to be appropriate and in the public
interest, a good faith estimate of an electric public utility's avoided cost,
levelized over the duration of the contract, determined as of the date the
contract is executed, may be used in a particular REPS cost recovery
proceeding. Determinations of avoided costs, including estimates thereof, shall
be subject to continuing Commission oversight and, if necessary, modification
should circumstances so require.

(3) "Energy efficiency measure" means
an equipment, physical, or program change that when implemented results in less
use of energy to perform the same function or provide the same level of
service. "Energy efficiency measure" does not include demand-side
management. It includes energy produced from a combined heat and power system
that uses nonrenewable resources to the extent the system:

(ii) Results in less energy used to perform the same
function or provide the same level of service at a retail electric customer's
facility.

(4) "Year-end number of customer accounts"
means the number of accounts within each customer class as of December 31 for a
given calendar year determined in a manner approved by the Commission pursuant
to subsection (c)(4) or determined in the same manner as that information is
reported to the Energy Information Administration, United States Department of
Energy, for annual electric sales and revenue reporting.

(5) "Utility compliance aggregator"
is an organization that assists an electric power supplier in demonstrating its
compliance with REPS. Such demonstration may include, among other things,
filing REPS compliance plans or reports and participating in NC-RETS on behalf
of the electric power supplier or a group of electric power suppliers.

(b) REPS compliance plan.

(1) Each year, beginning in 2008, each electric
power supplier or its designated utility compliance aggregator shall file with
the Commission the electric power supplier's plan for complying with G.S. 62-133.8(b),
(c), (d), (e) and (f). The plan shall cover the calendar year in which the plan
is filed and the immediately subsequent two calendar years. At a minimum, the
plan shall include the following information:

(i) a specific description of the electric power
supplier's planned actions to comply with G.S. 62-133.8(b), (c), (d), (e) and
(f) for each year;

(ii) a list of executed contracts to purchase renewable
energy certificates (whether or not bundled with electric power), including
type of renewable energy resource, expected MWh, and contract duration;

(iii) a list of those planned or implemented energy
efficiency and demand side management measures that the electric power supplier
plans to use toward REPS compliance, including a brief description of each
measure, its projected impacts, and a measurement and verification plan if such
plan has not otherwise been filed with the Commission;

(iv) the projected North Carolina retail sales and
year-end number of customer accounts by customer class for each year;

(v) the current and projected avoided cost rates for
each year;

(vi) the projected total and incremental costs
anticipated to implement the compliance plan for each year;

(vii) a comparison of projected costs to the annual cost
caps for each year;

(viii) for electric public utilities, an estimate of the
amount of the REPS rider and the impact on the cost of fuel and fuel-related
costs rider necessary to fully recover the projected costs; and

(ix) to the extent not already filed with the
Commission, the electric power supplier shall, on or before September 1 of each
year, file a renewable energy facility registration statement pursuant to Rule R8-66
for any facility it owns and upon which it is relying as a source of power or
RECs in its REPS compliance plan.

(2) Each electric power supplier shall file its
REPS compliance plan with the Commission on or before September 1 of each year.

(3) Any electric power supplier subject to Rule
R8-60 shall file its REPS compliance plan as part of its integrated resource
plan filing, and the REPS compliance plan will be reviewed and approved
pursuant to Rule R8-60. Approval of the REPS compliance plan as part of the
integrated resource plan shall not constitute an approval of the recovery of
costs associated with REPS compliance or a determination that the electric
power supplier has complied with G.S. 62 133.8(b), (c), (d), (e), and (f).

(4) An REPS compliance plan filed by an
electric power supplier not subject to Rule R8-60 shall be for information
only.

(c) REPS compliance report.

(1) Each year, beginning in 2009, each electric
power supplier or its designated utility compliance aggregator shall file with
the Commission a report describing the electric power supplier's compliance
with the requirements of G.S. 62-133.8(b), (c), (d), (e) and (f) during the
previous calendar year. The report shall include all of the following
information, including supporting documentation:

(i) the sources, amounts, and costs of renewable
energy certificates, by source, used to comply with G.S. 62-133.8(b), (c), (d),
(e) and (f). Renewable energy certificates for energy efficiency may be based
on estimates of reduced energy consumption through the implementation of energy
efficiency measures, to the extent approved by the Commission;

(ii) the actual North Carolina retail sales and
year-end number of customer accounts by customer class;

(iii) the current avoided cost rates and the avoided
cost rates applicable to energy received pursuant to long-term power purchase
agreements;

(iv) the actual total and incremental costs incurred
during the calendar year to comply with G.S. 62-133.8(b), (c), (d), (e) and
(f);

(v) a comparison of the actual incremental costs
incurred during the calendar year to the per-account annual charges (in G.S. 62-133.8(g)(4))
applied to its total number of customer accounts as of December 31 of the
previous calendar year;

(vi) the status of compliance with the requirements of
G.S. 62-133.8(b), (c), (d), (e) and (f);

(vii) the identification of any renewable energy
certificates or energy savings to be carried forward pursuant to G.S. 62-133.8(b)(2)f
or (c)(2)f;

(viii) the dates and amounts of all payments made for
renewable energy certificates; and

(ix) for electric membership corporations and municipal
electric suppliers, reduced energy consumption achieved in each year after
January 1, 2008, through the implementation of energy efficiency or demand-side
management programs, along with the results of each program's measurement and
verification plan, or other documentation supporting an estimate of the program's
energy reductions achieved in the previous year pending implementation of a
measurement and verification plan. Supporting documentation shall be retained
and made available for audit.

(2) Each electric public utility shall file its
annual REPS compliance report , together with direct testimony and exhibits of
expert witnesses, on the same date that it files (1) its cost recovery request
under Rule R8-67(e), and (2) the information required by Rule R8-55. The
Commission shall consider each electric public utility's REPS compliance report
at the hearing provided for in subsection (e) of this rule and shall determine
whether the electric public utility has complied with G.S. 62-133.8(b), (d),
(e) and (f). Public notice and deadlines for intervention and filing of
additional direct and rebuttal testimony and exhibits shall be as provided for
in subsection (e) of this rule.

(3) Each electric membership corporation and
municipal electric supplier or their designated utility compliance aggregator
shall file a verified REPS compliance report on or before September 1 of each
year. The Commission may issue an order scheduling a hearing to consider the
REPS compliance report filed by each electric membership corporation or
municipal electric supplier, requiring public notice, and establishing
deadlines for intervention and the filing of direct and rebuttal testimony and
exhibits.

(4) In each electric power supplier's initial
REPS compliance report, the electric power supplier shall propose a methodology
for determining its cap on incremental costs incurred to comply with G.S.
62-133.8(b), (c), (d), (e) and (f) and fund research as provided in G.S.
62-133.8(h)(1), including a determination of year-end number of customer
accounts. The proposed methodology may be specific to each electric power
supplier, shall be based upon a fair and reasonable allocation of costs, and
shall be consistent with G.S. 62-133.8(h). The electric power supplier may propose
a different methodology that meets the above requirements in a subsequent REPS
compliance report filing. For electric public utilities, this methodology shall
also be used for assessing the per-account charges pursuant to G.S.
62-133.8(h)(5).

(5) In any year, an electric power supplier or
other interested party may petition the Commission to modify or delay the
provisions of G.S. 62-133.8(b), (c), (d), (e) and (f), in whole or in part. The
Commission may grant such petition upon a finding that it is in the public
interest to do so. If an electric power supplier is the petitioner, it shall
demonstrate that it has made a reasonable effort to meet the requirements of
such provisions. Retroactive modification or delay of the provisions of G.S. 62-133.8(b),
(c), (d), (e) or (f) shall not be permitted. The Commission shall allow a
modification or delay only with respect to the electric power supplier or group
of electric power suppliers for which a need for a modification or delay has
been demonstrated.

(6) A group of electric power suppliers may
aggregate their REPS obligations and compliance efforts provided that all
suppliers in the group are subject to the same REPS obligations and compliance
methods as stated in either G.S. 133.8(b) or (c). If such a group of electric
power suppliers fails to meet its REPS obligations, the Commission shall find
and conclude that each supplier in the group, individually, has failed to meet
its REPS obligations.

(d) Renewable energy certificates.

(1) Renewable energy certificates (whether or
not bundled with electric power) claimed by an electric power supplier to
comply with G.S. 62-133.8(b), (c), (d), (e) and (f) must have been earned after
January 1, 2008; must have been purchased by the electric power supplier within
three years of the date they were earned; shall be retired when used for
compliance; and shall not be used for any other purpose. A renewable energy
certificate may be used to comply with G.S. 62-133.8(b), (c), (d), (e) and (f)
in the year in which it is acquired or obtained by an electric power supplier
or in any subsequent year; provided, however, that an electric public utility
must use a renewable energy certificate to comply with G.S. 62-133.8(b), (d),
(e) and (f) within seven years of cost recovery pursuant to subsection (e)(10)
of this Rule.

(2) For any facility that uses both renewable
energy resources and nonrenewable energy resources to produce energy, the
facility shall earn renewable energy certificates based only upon the energy
derived from renewable energy resources in proportion to the relative energy
content of the fuels used.

(3) Renewable energy certificates earned by a
renewable energy facility after the date the facility's registration is revoked
by the Commission shall not be used to comply with G.S. 62-133.8(b), (c), (d),
(e) and (f).

(4) Renewable energy certificates must be
issued by, or imported into, the renewable energy certificate tracking system
established in Rule R8-67(h) in order to be eligible RECs under G.S. 62-133.8.

(e) Cost recovery.

(1) For each electric public utility, the
Commission shall schedule an annual public hearing pursuant to G.S. 62-133.8(h)
to review the costs incurred by the electric public utility to comply with G.S.
62-133.8(b), (d), (e) and (f). The annual rider hearing for each electric
public utility will be scheduled as soon as practicable after the hearing held
by the Commission for the electric public utility under Rule R8-55.

(2) The Commission shall permit each electric
public utility to charge an increment or decrement as a rider to its rates to
recover in a timely manner the reasonable incremental costs prudently incurred
to comply with G.S. 62-133.8(b), (d), (e) and (f). The cost of an unbundled
renewable energy certificate, to the extent that it is reasonable and prudently
incurred, is an incremental cost and has no avoided cost component.

(3) Unless otherwise ordered by the
Commission, the test period for each electric public utility shall be the same
as its test period for purposes of Rule R8-55.

(4) Rates set pursuant to this section shall be
recovered during a fixed cost recovery period that shall coincide, to the
extent practical, with the recovery period for the cost of fuel and
fuel-related cost rider established pursuant to Rule R8-55.

(5) The incremental costs will be further
modified through the use of an REPS experience modification factor (REPS EMF)
rider. The REPS EMF rider will reflect the difference between reasonable and
prudently incurred incremental costs and the revenues that were actually
realized during the test period under the REPS rider then in effect. Upon
request of the electric public utility, the Commission shall also incorporate
in this determination the experienced over-recovery or under-recovery of the
incremental costs up to thirty (30) days prior to the date of the hearing,
provided that the reasonableness and prudence of these costs shall be subject
to review in the utility's next annual REPS cost recovery hearing.

(6) The REPS EMF rider will remain in effect
for a fixed 12-month period following establishment and will carry through as a
rider to rates established in any intervening general rate case proceedings.

(7) Pursuant to G.S. 62-130(e), any
over-collection of reasonable and prudently incurred incremental costs to be
refunded to a utility's customers through operation of the REPS EMF rider shall
include an amount of interest, at such rate as the Commission determines to be
just and reasonable, not to exceed the maximum statutory rate.

(8) Each electric public utility shall follow
deferred accounting with respect to the difference between actual reasonable
and prudently-incurred incremental costs and related revenues realized under
rates in effect.

(9) The incremental costs to be recovered by an
electric public utility in any cost recovery period from its North Carolina
retail customers to comply with G.S. 62-133.8(b), (d), (e), and (f) shall not
exceed the per-account charges set forth in G.S. 62-133.8(h)(4) applied to the
electric public utility's year-end number of customer accounts determined as of
December 31 of the previous calendar year. These annual charges shall be
collected through fixed monthly charges. Each electric public utility shall
ensure that the incremental costs recovered under the REPS rider and REPS EMF
rider during the cost recovery period, inclusive of gross receipts tax and the
regulatory fee, from any given customer account do not exceed the applicable
per-account charges set forth in G.S. 62-133.8(h)(4).

(10) Incremental costs incurred during a calendar
year toward a current or future year's REPS obligation may be recovered by an
electric public utility in any 12-month recovery period up to and including the
12-month recovery period in which the RECs associated with any incremental
costs are retired toward the prior year's REPS obligation, as long as the
electric public utility's charges to customers do not exceed, in any 12-month
period, the per-account annual charges provided in G.S. 62-133.8(h)(4). A
renewable energy certificate must be used for compliance and retired within
seven years of the year in which the electric public utility recovers the
related costs from customers. An electric public utility shall refund to
customers with interest the costs for renewable energy certificates that are
not used for compliance within seven years.

(11) Each electric public utility, at a minimum,
shall submit to the Commission for purposes of investigation and hearing the
information required for the REPS compliance report for the 12-month test
period established in subsection (3) normalized, as appropriate, consistent
with Rule R8-55, accompanied by supporting workpapers and direct testimony and
exhibits of expert witnesses, and any change in rates proposed by the electric
public utility at the same time that it files the information required by Rule R8-55.

(12) The electric public utility shall publish a
notice of the annual hearing for two (2) successive weeks in a newspaper or
newspapers having general circulation in its service area, normally beginning
at least 30 days prior to the hearing, notifying the public of the hearing
before the Commission pursuant to G.S. 62-133.8(h) and setting forth the time
and place of the hearing.

(13) Persons having an interest in said hearing
may file a petition to intervene setting forth such interest at least 15 days
prior to the date of the hearing. Petitions to intervene filed less than 15
days prior to the date of the hearing may be allowed in the discretion of the
Commission for good cause shown.

(14) The Public Staff and other intervenors shall
file direct testimony and exhibits of expert witnesses at least 15 days prior
to the hearing date. If a petition to intervene is filed less than 15 days
prior to the hearing date, it shall be accompanied by any direct testimony and
exhibits of expert witnesses the intervenor intends to offer at the hearing.

(15) The electric public utility may file
rebuttal testimony and exhibits of expert witnesses no later than 5 days prior
to the hearing date.

(16) The burden of proof as to whether the costs
were reasonable and prudently incurred shall be on the electric public utility.

(f) Contracts with owners of renewable energy facilities.

(1) The terms of any contract entered into
between an electric power supplier and a new solar electric facility or new
metered solar thermal energy facility shall be of sufficient length to
stimulate development of solar energy.

(2) Each electric power supplier shall include
appropriate language in all agreements for the purchase of renewable energy certificates
(whether or not bundled with electric power) prohibiting the seller from
remarketing the renewable energy certificates being purchased by the electric
power supplier.

(g) Metering of renewable energy facilities.

(1) Except as provided below, for the purpose
of receiving renewable energy certificate issuance in NC-RETS, the electric
power generated by a renewable energy facility shall be measured by an electric
meter supplied by and read by an electric power supplier. Facilities whose
renewable energy certificates are issued in a tracking system other than
NC-RETS shall be subject to the requirements of the applicable state commission
and/or tracking system.

(2) The electric power generated by an
inverter-based solar photovoltaic (PV) system with a nameplate capacity of 10
kW or less may be estimated using generally accepted analytical tools.

(3) The electric power generated by a renewable
energy facility interconnected on the customer's side of the utility meter at a
customer's location may be measured by (1) an ANSI-certified electric meter not
provided by an electric power supplier provided that the owner of the meter
complies with the meter testing requirements of Rule R8-13, or (2) another
industry-accepted, auditable and accurate metering, controls, and verification
system. The data provided by such meter or system may be read and self-reported
by the owner of the renewable energy facility, subject to audit by the Public
Staff. The owner of the meter shall retain for audit for 10 years the energy
output data.

(4) Thermal energy produced by a combined heat
and power system or solar thermal energy facility shall be the thermal energy
recovered and used for useful purposes other than electric power production.
The useful thermal energy may be measured by meter, or if that is not
practicable, by other industry-accepted means that show what measurable amount
of useful thermal energy the system or facility is designed and operated to
produce and use. Renewable energy certificates shall be earned based on one
certificate for every 3,412,000 British thermal units (Btu) of useful thermal
energy produced. Meter devices, if used, shall be located so as to measure the
actual thermal energy consumed by the load served by the facility. Thermal
energy output that is used as station power or to process the facility's fuel
is not eligible for RECs. Thermal energy production data, whether metered or
estimated, shall be retained for audit for 10 years.

(i) "Balancing area operator" means an
electric power supplier that has the responsibility to act as the balancing
authority for a portion of the regional transmission grid, including
maintaining the load-to-generation balance, accounting for energy delivered
into and exported out of the area, and supporting interconnection frequency in
real time.

(ii) "Multi-fuel facility" means a renewable
energy facility that produces energy using more than one fuel type, potentially
relying on a fuel that does not qualify for REC issuance in North Carolina.

(iii) "Participant" means a person or
organization that opens an account in NC-RETS.

(iv) "Qualifying thermal energy output" is the
useful thermal energy: (1) that is made available to an industrial or
commercial process (net of any heat contained in condensate return and/or
makeup water); (2) that is used in a heating application (e.g., space heating,
domestic hot water heating); or (3) that is used in a space cooling application
(i.e., thermal energy used by an absorption chiller).

(2) A renewable energy certificate (REC)
tracking system, to be known as NC-RETS, is established by the Commission. NC-RETS
shall issue, track, transfer and retire RECs. It shall calculate each electric
power supplier's REPS obligation and report each electric power supplier's REPS
accomplishments, consistent with the compliance report filed under Rule
R8-67(c). NC-RETS shall be administered by a third-party vendor selected by the
Commission. Only RECs issued by or imported into NC-RETS are qualifying RECs
under G.S. 62-133.8.

(3) Each electric power supplier shall be a
participant in NC-RETS and shall provide data to NC-RETS to calculate its REPS
obligation and to demonstrate its compliance with G.S. 62-133.8. An electric
power supplier may select a utility compliance aggregator to participate in
NC-RETS on its behalf and file REPS compliance plans and compliance reports,
but the supplier shall nonetheless remain responsible for its own compliance.
For reporting purposes, an electric power supplier or its utility compliance
aggregator may aggregate the supplier's compliance obligations and
accomplishments with those of other suppliers that are subject to the same
obligations under G.S. 62-133.8.

(4) Each renewable energy facility or new
renewable energy facility registered by the Commission under Rule R8-66 shall
participate in NC-RETS in order to have RECs issued, or in another REC tracking
system in order to have RECs issued and transferred into NC-RETS, but no facility's
meter data for the same time period shall be used for simultaneous REC issuance
in two such systems. Beginning June 1, 2011, renewable energy facilities
registered in NC-RETS may only enter historic energy production data for REC
issuance that goes back up to two years from the current date. Facilities that
produce energy using one or more renewable energy resource(s) and another
resource that does not qualify toward REPS compliance under G.S. 62-133.8 shall
calculate on a monthly basis and provide to NC-RETS the percentage of energy
output attributable to each fuel source. NC-RETS will issue RECs only for
energy emanating from sources that qualify under G.S. 62-133.8.

(5) Each balancing area operator shall provide
monthly electric generation production data to NC-RETS for renewable and new
renewable energy facilities that are interconnected to the operator's electric
transmission system. Such balancing area operator shall retain documentation
verifying the production data for audit by the Public Staff.

(6) Each electric power supplier that has
registered renewable energy facilities or new renewable energy facilities
interconnected with its electric distribution system and that reads the
electric generation production meters for those facilities shall provide
monthly the facilities' energy output to NC-RETS, and shall retain for audit
for 10 years that energy output data. Municipalities and electric membership
corporations may elect to have the facilities' production data reported to
NC-RETS and retained for audit by a utility compliance aggregator.

(7) A renewable energy facility or new
renewable energy facility that produces thermal energy that qualifies for RECs
shall report the facility's qualifying thermal energy output to NC-RETS at
least every 12 months. A renewable energy facility or new renewable energy
facility that reports its data pursuant to Rule R8-67(g)(3) shall report its
energy output to NC-RETS at least every 12 months.

(8) The owner of an inverter-based solar
photovoltaic system with a nameplate capacity of 10 kW or less may estimate its
energy output using generally accepted analytical tools pursuant to Rule R8-67(g)(2).
Such an owner, or its agent, of this kind of facility shall report the facility's
energy output to NC‑RETS at least every 12 months.

(9) All energy output and fuel data for
multi-fuel facilities, including underlying documentation, calculations, and
estimates, shall be retained for audit for at least ten years immediately
following the provision of the output data to NC-RETS or another tracking
system, as appropriate.

(10) Each electric power supplier that complies
with G.S. 62-133.8 by implementing energy efficiency or demand-side management
programs shall use NC-RETS to report the energy savings of those programs. Municipal
power suppliers and electric membership corporations may elect to have their
energy savings from their energy efficiency and demand-side management programs
reported to NC-RETS by a utility compliance aggregator, and to have their
reported savings consolidated with the reported savings from other municipal
power suppliers or electric membership corporations if and as necessary to
permit aggregate reporting through their utility compliance aggregator. Records
regarding which electric power supplier achieved the energy efficiency and
demand-side management, the programs that were used, and the year in which it
was achieved, shall be retained for audit.

(11) All Commission-approved costs of developing
and operating NC-RETS shall be allocated among all electric power suppliers
based upon their respective share of the total megawatt-hours of retail
electricity sales in North Carolina in the previous calendar year. Each
electric power supplier, or its utility compliance aggregator, shall, within 60
days of NC-RETS beginning operations, and by June 1 of each subsequent year,
enter its previous year's retail electricity sales into NC-RETS, which sales
will be used by NC-RETS to calculate each electric power supplier's REPS
obligations and NC-RETS charges. NC-RETS shall update its billings beginning
each July based on retail sales data for the previous calendar year. Such NC-RETS
charges shall be deemed to be costs that are reasonable, prudent, incremental,
and eligible for recovery through each electric public utility's annual rider
established pursuant to G.S. 62-133.8(h).

(12) Each account holder in NC-RETS shall pay the
NC-RETS administrator for service according to the following fee schedule:

(i) $0.01 for each REC export to an account residing
in a different REC tracking system.

(ii) $0.01 for each REC retired for reasons other than
compliance with G.S. 62-133.8.

(13) The Commission shall adopt NC-RETS Operating
Procedures. The Commission shall establish an NC-RETS Stakeholder Group that
shall meet from time to time and which may recommend changes to the NC-RETS
Operating Procedures and NC-RETS.

(14) All data retention requirements of this Rule
R8-67(h) may be accomplished via retention of electronic documents.

(a) Purpose. — The purpose of this rule is to establish
guidelines for the application of G.S. 62-140(c) to electric public utilities
and electric membership corporations and G.S. 62-133.9 to electric public
utilities that are consistent with the directives of those statutes and consistent
with the public policy of this State as set forth in G.S. 62-2.

(b) Definitions.

(1) Unless listed below, the definitions of all
terms used in this rule shall be as set forth in Rule R8-67(a), or if not
defined therein, then as set forth in G.S. 62-3, G.S. 62-133.8(a) and G.S. 62-133.9(a).

(2) "Consideration" means anything of
economic value paid, given, or offered to any person by an electric public
utility or electric membership corporation (regardless of the source of the "consideration'')
including, but not limited to: payments to manufacturers, builders, equipment
dealers, contractors including HVAC contractors, electricians, plumbers,
engineers, architects, and/or homeowners or owners of multiple housing units or
commercial establishments; cash rebates or discounts on equipment/appliance
sales, leases, or service installation; equipment/ appliances sold below fair
market value or below their cost to the electric public utility or electric
membership corporation; low interest loans, defined as loans at an interest
rate lower than that available to the person to whom the proceeds of the loan
are made available; studies on energy usage; model homes; and payment of trade
show or advertising costs. Excepted from the definition of "consideration"
are favors and promotional activities that are de minimis and nominal in value
and that are not directed at influencing fuel choice decisions for specific
applications or locations.

(3) "Costs" include, but are not
limited to, all capital costs (including cost of capital and depreciation
expenses), administrative costs, implementation costs, participation
incentives, and operating costs. "Costs" does not include utility
incentives.

(4) "Electric public utility" means a
person, whether organized under the laws of this State or under the laws of any
other state or country, now or hereafter owning or operating in this State
equipment or facilities for producing, transporting, distributing, or
furnishing electric service to or for the public for consumption. For purposes
of this rule, "electric public utility" does not include electric
membership corporations.

(5) "Net lost revenues" means the
revenue losses, net of marginal costs avoided at the time of the lost
kilowatt-hour sale(s), or in the case of purchased power, in the applicable
billing period, incurred by the electric public utility as the result of a new
demand-side management or energy efficiency measure. Net lost revenues shall
also be net of any increases in revenues resulting from any activity by the electric
public utility that causes a customer to increase demand or energy consumption,
whether or not that activity has been approved pursuant to this Rule R8-68.

(6) "New demand-side management or energy
efficiency measure" means a demand-side management or energy efficiency
measure that is adopted and implemented on or after January 1, 2007, including
subsequent changes and modifications to any such measure. Cost recovery for "new
demand-side management measures" and "new energy efficiency measures"
is subject to G.S. 62-133.9.

(7) "Participation incentive" means
any consideration associated with a new demand-side management or energy
efficiency measure.

(8) "Program" or "measure"
means any electric public utility action or planned action that involves the
offering of consideration.

(9) "Utility incentives" means incentives
as described in G.S. 62-133.9(d)(2)a-c.

(c) Filing for Approval.

(1) Application of Rule.

(i) Prior to an electric public utility or electric
membership corporation implementing any measure or program, the purpose or
effect of which is to directly or indirectly alter or influence the decision to
use the electric public utility's or electric membership corporation's service
for a particular end use or to directly or indirectly encourage the
installation of equipment that uses the electric public utility's or electric
membership corporation's service, and prior to any electric power supplier to
which Rule R8-60 applies implementing any new or modified demand-side
management or energy efficiency measure, the electric public utility or the
electric membership corporation, as applicable, shall obtain Commission
approval, regardless of whether the measure or program is offered at the
expense of the shareholders, ratepayers, or third-party.

(ii) This requirement shall also apply to measures and
programs that are administered, promoted, or funded by the electric public
utility's or electric membership corporation's subsidiaries, affiliates, or
unregulated divisions or businesses if the electric public utility or electric
membership corporation has control over the entity offering or is involved in
the measure or program and an intent or effect of the measure or program is to
adopt, secure, or increase the use of the electric public utility's public
utility services.

(iii) Any application for approval by an electric public
utility or electric membership corporation of a measure or program under this
rule shall be made in a unique sub-docket of the electric public utility's or
electric membership corporation's docket number.

(i) Cover Page. — The electric public utility or
electric membership corporation shall attach to the front of an application a
cover sheet generally describing:

a. the measure or program;

b. the consideration to be offered;

c. the anticipated total cost of the measure or
program;

d. the source and amount of funding to be used;
and

e. the proposed classes of persons to whom it will
be offered.

(ii) Description. — The electric public utility or
electric membership corporation shall provide a description of each measure and
program, and include the following:

a. the program or measure's objective;

b. the duration of the program or measure;

c. the targeted sector and eligibility
requirements;

d. examples of all communication materials to be
used with the measure or program and the related cost for each program year;

e. the estimated number of participants;

f. the impact that each measure or program is
expected to have on the electric public utility or electric membership
corporation, its customer body as a whole, and its participating North Carolina
customers; and

g. any other information the electric public
utility or electric membership corporation believes is relevant to the
application, including information on competition known by the electric public
utility or the electric membership corporation.

(iii) Additionally, an electric public utility shall
include or describe:

a. the measure's proposed marketing plan,
including a description of market barriers and how the electric public utility
intends to address them;

b. the total market potential and estimated market
growth throughout the duration of the program;

c. the estimated summer and winter peak demand
reduction by unit metric and in the aggregate by year;

d. the estimated energy reduction per appropriate
unit metric and in the aggregate by year;

e. the estimated lost energy sales per appropriate
unit metric and in the aggregate by year; and

f. the estimated load shape impacts.

(iv) Costs and Benefits. — The electric public utility
or electric membership corporation shall provide the following information on
the costs and benefits of each proposed measure or program: (a) the estimated
total and per unit cost and benefit of the measure or program to the electric
public utility or electric membership corporation, reported by type of benefit
and expenditure (e.g., capital cost expenditures; administrative costs;
operating costs; participation incentives, such as rebates and direct payments;
and communications costs, and the costs of measurement and verification) and
the planned accounting treatment for those costs and benefits; (b) the type,
the maximum and minimum amount of participation incentives to be made to any
party, and the reason for any participation incentives and other consideration
and to whom they will be offered, including schedules listing participation
incentives and other consideration to be offered; and (c) service limitations
or conditions planned to be imposed on customers who do not participate in the
measure. With respect to communications costs, the electric public utility or
electric membership corporation shall provide detailed cost information on
communications materials related to each proposed measure or program. Such
costs shall be included in the Commission's consideration of the total cost of
the measure or program and whether the total cost of the measure or program is
reasonable in light of the benefits.

(v) Cost-Effectiveness Evaluation. — The electric
public utility or electric membership corporation shall provide the economic
justification for each proposed measure or program, including the results of
all cost-effectiveness tests. Cost-effectiveness evaluations performed by the
electric public utility or electric membership corporation should be based on
direct or quantifiable costs and benefits and should include, at a minimum, an
analysis of the Total Resource Cost Test, the Participant Test, the Utility
Cost Test, and the Ratepayer Impact Measure Test. In addition, an electric
public utility shall describe the methodology used to produce the impact
estimates as well as, if appropriate, methodologies considered and rejected in
the interim leading to the final model specification.

(vi) Commission Guidelines Regarding Incentive Programs.
— The electric public utility or electric membership corporation shall provide
the information necessary to comply with the Commission's Revised Guidelines
for Resolution of Issues Regarding Incentive Programs, issued by Commission
Order on March 27, 1996, in Docket No. M-100, Sub 124, set out as an Appendix
to Chapter 8 of these rules.

(vii) Integrated Resource Plan. — When seeking approval
of a new demand-side management or new energy efficiency measure, the electric
public utility shall explain in detail how the measure is consistent with the
electric public utility's integrated resource plan filings pursuant to Rule R8-60.

(viii) Other. — Any other information the electric public
utility or electric membership corporation believes relevant to the
application, including information on competition known by the electric public
utility or the electric membership corporation.

(3) Additional Filing Requirements. — In
addition to the information listed in subsection (c)(2), an electric public
utility filing for approval of a new or modified demand-side management or
energy efficiency measure shall provide the following:

(i) Costs and Benefits. – The electric public utility
shall describe:

a. any costs incurred or expected to be incurred
in adopting and implementing a measure or program to be considered for recovery
through the annual rider under G.S. 62-133.9;

b. estimated total costs to be avoided by the
measure by appropriate capacity, energy and measure unit metric and in the
aggregate by year;

c. estimated participation incentives by
appropriate capacity, energy, and measure unit metric and in the aggregate by
year;

d. how the electric public utility proposes to
allocate the costs and benefits of the measure among the customer classes and
jurisdictions it serves;

e. the capitalization period to allow the utility
to recover all costs or those portions of the costs associated with a new
program or measure to the extent that those costs are intended to produce future
benefits as provided in G.S. 62-133.9(d)(1).

f. The electric public utility shall also include
the estimated and known costs of measurement and verification activities
pursuant to the Measurement and Verification Reporting Plan described in
paragraph (ii).

(ii) Measurement and Verification Reporting Plan for
New Demand-Side Management and Energy Efficiency Measures. — The electric
public utility shall be responsible for the measurement and verification of
energy and peak demand savings and may use the services of an independent third
party for such purposes. The costs of implementing the measurement and
verification process may be considered as operating costs for purposes of
Commission Rule R8-69. In addition, the electric public utility shall:

a. describe the industry-accepted methods to be
used to evaluate, measure, verify, and validate the energy and peak demand
savings estimated in (2)(iii)c and d above;

b. provide a schedule for reporting the savings to
the Commission;

c. describe the methodologies used to produce the
impact estimates, as well as, if appropriate, the methodologies it considered
and rejected in the interim leading to final model specification; and

d. identify any third party and include all of the
costs of that third party, if the electric public utility plans to utilize an
independent third party for purposes of measurement and verification.

(iii) Cost recovery mechanism. — The electric public
utility shall describe the proposed method of cost recovery from its customers.

(iv) Tariffs or rates. — The electric public utility
shall provide proposed tariffs or modifications to existing tariffs that will
be required to implement each measure or program.

(v) Utility Incentives. — When seeking approval of new
demand-side management and energy efficiency measures, the electric public
utility shall indicate whether it will seek to recover any utility incentives,
including, if appropriate, net lost revenues, in addition to its costs. If the
electric public utility proposes recovery of utility incentives related to the
proposed new demand-side management or energy efficiency measure, it shall
describe the utility incentives it desires to recover and describe how its
measurement and verification reporting plan will demonstrate the results
achieved by the proposed measure. If the electric public utility proposes
recovery of net lost revenues, it shall describe estimated net lost revenues by
appropriate capacity, energy and measure unit metric and in the aggregate by
year. If the electric public utility seeks recovery of utility incentives,
including net lost revenues, apart from its recovery of its costs under G.S.
62-133.9, it shall file estimates of the utility incentives and the net lost
revenues associated with the proposed measure for each year of the proposed
recovery. If the electric public utility seeks only the recovery of net lost
revenues apart from its recovery of combined costs and utility incentives, it
shall file estimates of net lost revenues for each year of the proposed
recovery period.

(d) Procedure.

(1) Automatic Tariff Suspension. – If an
electric public utility files a proposed tariff or tariff amendment in
connection with an application for approval of a measure or program, the tariff
filing shall be automatically suspended pursuant to G.S. 62-134 pending
investigation, review, and decision by the Commission.

(2) Service and Response. — The electric public
utility or electric membership corporation filing for approval of a measure or
program shall serve a copy of its filing on the Public Staff; the Attorney
General; the natural gas utilities, electric public utilities, and electric
membership corporations operating in the filing electric public utility's or
electric membership corporation's certified territory; and any other party that
has notified the electric public utility or electric membership corporation in
writing that it wishes to be served with copies of all filings. If a party consents,
the electric public utility or electric membership corporation may serve it
with electronic copies of all filings. Those served, and others learning of the
application, shall have thirty (30) days from the date of the filing in which
to petition for intervention pursuant to Rule R1-19, file a protest pursuant to
Rule R1-6, or file comments on the proposed measure or program. In comments,
any party may recommend approval or disapproval of the measure or program or
identify any issue relative to the program application that it believes
requires further investigation. The filing electric public utility or electric
membership corporation shall have the opportunity to respond to the petitions,
protests, or comments within ten (10) days of their filing. If any party raises
an issue of material fact, the Commission shall set the matter for hearing. The
Commission may determine the scope of this hearing.

(3) Notice and Schedule. — If the application
is set for hearing, the Commission shall require notice, as it considers
appropriate, and shall establish a procedural schedule for prefiled testimony
and rebuttal testimony after a discovery period of at least 45 days. Where
possible, the hearing shall be held within ninety (90) days from the
application filing date.

(e) Scope of Review. — In determining whether to approve in
whole or in part a new measure or program or changes to an existing measure or
program, the Commission may consider any information it determines to be
relevant, including any of the following issues:

(1) Whether the proposed measure or program is
in the public interest and benefits the electric public utility's or electric
membership corporation's overall customer body;

(2) Whether the proposed measure or program
unreasonably discriminates among persons receiving or applying for the same
kind and degree of service;

(3) Evidence of consideration or compensation
paid by any competitor, regulated or unregulated, of the electric public
utility or electric membership corporation to secure the installation or
adoption of the use of such competitor's services;

(4) Whether the proposed measure or program
promotes unfair or destructive competition or is inconsistent with the public
policy of this State as set forth in G.S. 62-2 and G.S. 62-140; and

(5) The impact of the proposed measure or
program on peak loads and load factors of the filing electric public utility or
electric membership corporation, and whether it encourages energy efficiency.

(f) Cost Recovery for New Measures. — Approval of a program
or measure under Commission Rule R8-68 does not constitute approval of rate
recovery of the costs of the program or measure. With respect to new
demand-side management and energy efficiency measures, the costs of those new
measures, approved by application of this rule, that are found to be reasonable
and prudently incurred shall be recovered through the annual rider described in
G.S. 62-133.9 and Rule R8-69. The Commission may consider in the annual rider
proceeding whether to approve the inclusion of any utility incentive pursuant
to G.S. 62-133.9(d)(2)a-c. in the annual rider.

(1) Unless listed below, the definitions of all
terms used in this rule shall be as set forth in Rules R8‑67 and R8‑68,
or if not defined therein, then as set forth in G.S. 62‑133.8(a) and G.S.
62‑133.9(a).

(2) "DSM/EE rider" means a charge or
rate established by the Commission annually pursuant to G.S. 62‑133.9(d)
to allow the electric public utility to recover all reasonable and prudent
costs incurred in adopting and implementing new demand-side management and
energy efficiency measures after August 20, 2007, as well as, if appropriate,
utility incentives, including net lost revenues.

(3) "Large commercial customer" means
any commercial customer that has an annual energy usage of not less than
1,000,000 kilowatt-hours (kWh), measured in the same manner as the electric
public utility that serves the commercial customer measures energy for billing
purposes.

(4) "Rate period" means the period
during which the DSM/EE rider established under this rule will be in effect.
For each electric public utility, this period will be the same as the period
during which the rider established under Rule R8‑55 is in effect.

(5) "Test period" shall be the same
for each public utility as its test period for purposes of Rule R8‑55,
unless otherwise ordered by the Commission.

(b) Recovery of Costs.

(1) Each year the Commission shall conduct a
proceeding for each electric public utility to establish an annual DSM/EE
rider. The DSM/EE rider shall consist of a reasonable and appropriate estimate
of the expenses expected to be incurred by the electric public utility, during
the rate period, for the purpose of adopting and implementing new demand-side
management and energy efficiency measures previously approved pursuant to Rule R8‑68.
The expenses will be further modified through the use of a DSM/EE experience
modification factor (DSM/EE EMF) rider. The DSM/EE EMF rider will reflect the
difference between the reasonable expenses prudently incurred by the electric
public utility during the test period for that purpose and the revenues that
were actually realized during the test period under the DSM/EE rider then in
effect. Those expenses approved for recovery shall be allocated to the North
Carolina retail jurisdiction consistent with the system benefits provided by
the new demand-side management and energy efficiency measures and shall be
assigned to customer classes in accordance with G.S. 62‑133.9(e) and (f).

(2) Upon the request of the electric public
utility, the Commission shall also incorporate the experienced over-recovery or
under-recovery of costs up to thirty (30) days prior to the date of the hearing
in its determination of the DSM/EE EMF rider, provided that the reasonableness
and prudence of these costs shall be subject to review in the utility's next
annual DSM/EE rider hearing.

(3) Pursuant to G.S. 62‑130(e), any
over-collection of reasonable and prudently incurred costs to be refunded to an
electric public utility's customers through operation of the DSM/EE EMF rider
shall include an amount of interest, at such rate as the Commission determines
to be just and reasonable, not to exceed the maximum statutory rate. The
beginning date for measurement of such interest shall be the effective date of
the DSM/EE EMF rider in each annual proceeding, unless otherwise determined by
the Commission.

(4) The burden of proof as to whether the costs
were reasonably and prudently incurred shall be on the electric public utility.

(5) Any costs incurred for adopting and
implementing measures that do not constitute new demand-side management or
energy efficiency measures are ineligible for recovery through the annual rider
established in G.S. 62‑133.9.

(6) Except as provided in (c)(3) of this rule,
each electric public utility may implement deferral accounting for costs
considered for recovery through the annual rider. At the time the Commission
approves a new demand-side management or energy efficiency measure under Rule R8‑68,
the electric public utility may defer costs of adopting and implementing the
new measure in accordance with the Commission's approval order under
Rule R8‑68. Subject to the Commission's review, the electric public
utility may begin deferring the costs of adopting and implementing new
demand-side management or energy efficiency measures six (6) months prior to
the filing of its application for approval under Rule R8‑68, except
that the Commission may consider earlier deferral of development costs in exceptional
cases, where such deferral is necessary to develop an energy efficiency
measure. Deferral accounting, however, for any administrative costs, general
costs, or other costs not directly related to a new demand-side management or
energy efficiency measure must be approved prior to deferral. The balance in
the deferral account, net of deferred income taxes, may accrue a return at the
net-of-tax rate of return approved in the electric public utility's most recent
general rate proceeding. The return so calculated will be adjusted in any rider
calculation to reflect necessary recoveries of income taxes. This return is not
subject to compounding. The accrual of such return of on any under-recovered or
over-recovered balance set in an annual proceeding for recovery or refund
through a DSM/EE EMF rider shall cease as of the effective date of the DSM/EE
EMF rider in that proceeding, unless otherwise determined by the Commission.
However, deferral accounting of costs shall not affect the Commission's
authority under this rule to determine whether the deferred costs may be
recovered.

(c) Utility Incentives.

(1) With respect to a new demand-side
management or energy efficiency measure previously approved under Rule R8‑68,
the electric public utility may, in its annual filing, apply for recovery of
any utility incentives, including, if appropriate, net lost revenues,
identified in its application for approval of the measure. The Commission shall
determine the appropriate ratemaking treatment for any such utility incentives.

(2) When requesting inclusion of a utility
incentive in the annual rider, the electric public utility bears the burden of
proving its calculations of those utility incentives and the justification for
including them in the annual rider, either through its measurement and
verification reporting plan or through other relevant evidence.

(3) An electric public utility shall not be
permitted to implement deferral accounting or the accrual of a return for
utility incentives unless the Commission approves an annual rider that provides
for recovery of an integrated amount of costs and utility incentives. In that
instance, the Commission shall determine the extent to which deferral
accounting and the accrual of a return will be allowed.

(d) Special Provisions for Industrial or Large Commercial
Customers.

(1) Pursuant to G.S. 62‑133.9(f), any
industrial customer or large commercial customer may notify its electric power
supplier that: (i) it has implemented or, in accordance with stated,
quantifiable goals, will implement alternative demand-side management or energy
efficiency measures; and (ii) it elects not to participate in demand-side
management or energy efficiency measures for which cost recovery is allowed
under G.S. 62‑133.9. Any such customer shall be exempt from any annual
rider established pursuant to this rule after the date of notification.

(2) At the time the electric public utility
petitions for the annual rider, it shall provide the Commission with a list of
those industrial or large commercial customers that have opted out of
participation in the new demand-side management or energy efficiency measures.
The electric public utility shall also provide the Commission with a listing of
industrial or large commercial customers that have elected to participate in
new measures after having initially notified the electric public utility that
it declined to participate.

(3) Any customer that opts out but subsequently
elects to participate in a new demand-side management or energy efficiency
measure or program loses the right to be exempt from payment of the rider for
five years or the life of the measure or program, whichever is longer. For
purposes of this subsection, "life of the measure or program" means
the capitalization period approved by the Commission to allow the utility to
recover all costs or those portions of the costs associated with a program or
measure to the extent that those costs are intended to produce future benefits
as provided in G.S. 62‑133.9(d)(1).

(e) Annual Proceeding.

(1) For each electric public utility, the
Commission shall schedule an annual rider hearing pursuant to G.S. 62‑133.9(d)
to review the costs incurred by the electric public utility in the adoption and
implementation of new demand-side management and energy efficiency measures
during the test period, the revenues realized during the test period through
the operation of the annual rider, and the costs expected to be incurred during
the rate period and shall establish annual DSM/EE and DSM/EE EMF riders to
allow the electric public utility to recover all costs found by the Commission
to be recoverable. The Commission may also approve, if appropriate, the
recovery of utility incentives, including net lost revenues, pursuant to G.S. 62‑133.9(d)(2)
in the rider.

(2) The annual rider hearing for each electric
public utility will be scheduled as soon as practicable after the hearing held
by the Commission for the electric public utility under Rule R8‑55. Each
electric public utility shall file its application for recovery of costs and
appropriate utility incentives at the same time that it files the information
required by Rule R8‑55.

(3) The DSM/EE EMF rider will remain in effect
for a fixed 12‑month period following establishment and will continue as
a rider to rates established in any intervening general rate case proceeding.

(f) Filing Requirements and Procedure.

(1) Each electric public utility shall submit
to the Commission all of the following information and data in its application:

(ii) For each measure for which cost recovery is
requested through the DSM/EE rider:

a. total expenses expected to be incurred during
the rate period in the aggregate and broken down by type of expenditure, per
appropriate capacity, energy and measure unit metric and the proposed
jurisdictional allocation factors;

b. total costs that the utility does not expect to
incur during the rate period as a direct result of the measure in the aggregate
and broken down by type of cost, per appropriate capacity, energy and measure
unit metric, and the proposed jurisdictional allocation factors, as well as any
changes in the estimated future amounts since last filed with the Commission;

c. a description of the measurement and verification
activities to be conducted during the rate period, including their estimated
costs;

d. total expected summer and winter peak demand
reduction per appropriate measure unit metric and in the aggregate;

e. total expected energy reduction in the aggregate
and per appropriate measure unit metric.

(iii) For each measure for which cost recovery is
requested through the DSM/EE EMF rider:

a. total expenses for the test period in the
aggregate and broken down by type of expenditure, per appropriate capacity, energy
and measure unit metric and the proposed jurisdictional allocation factors;

b. total costs that the utility did not incur for
the test period as a direct result of the measure in the aggregate and broken
down by type of cost, per appropriate capacity, energy and measure unit metric,
and the proposed jurisdictional allocation factors, as well as any changes in
the estimated future amounts since last filed with the Commission;

c. a description of, the results of, and the costs
of all measurement and verification activities conducted in the test period;

d. total summer and winter peak demand reduction
in the aggregate and per appropriate measure unit metric, as well as any
changes in estimated future amounts since last filed with the Commission;

e. total energy reduction in the aggregate and per
appropriate measure unit metric, as well as any changes in the estimated future
amounts since last filed with the Commission;

f. a discussion of the findings and the results of
the program or measure;

g. evaluations of event-based programs including
the date, weather conditions, event trigger, number of customers notified and
number of customers enrolled; and

h. a comparison of impact estimates presented in
the measure application from the previous year, those used in reporting for
previous measure years, and an explanation of significant differences in the
impacts reported and those previously found or used.

(iv) For each measure for which recovery of utility
incentives is requested, a detailed explanation of the method proposed for
calculating those utility incentives, the actual calculation of the proposed
utility incentives, and the proposed method of providing for their recovery and
true-up through the annual rider. If recovery of net lost revenues is requested,
the total net lost kWh sales and net lost revenues per appropriate capacity,
energy, and program unit metric and in the aggregate for the test period, and
the proposed jurisdictional allocation factors, as well as any changes in
estimated future amounts since last filed with the Commission.

(v) Actual revenues produced by the DSM/EE rider and
the DSM/EE EMF rider established by the Commission during the test period and
for all available months immediately preceding the rate period.

(vi) The requested DSM/EE rider and DSM/EE EMF rider and
the basis for their determination.

(vii) Projected North Carolina retail monthly kWh sales
for the rate period for all industrial and large commercial accounts, in the
aggregate, that are not assessed the rider charges as provided in this rule.

(viii) All workpapers supporting the calculations and
adjustments described above.

(2) Each electric public utility shall file the
information required under this rule, accompanied by workpapers and direct
testimony and exhibits of expert witnesses supporting the information filed in
this proceeding, and any change in rates proposed by the electric public
utility, by the date specified in subdivision (e)(2) of this rule. An electric
public utility may request a rider lower than that to which its filed
information suggests that it is entitled.

(3) The electric public utility shall publish a
notice of the annual hearing for two (2) successive weeks in a newspaper or
newspapers having general circulation in its service area, normally beginning
at least thirty (30) days prior to the hearing, notifying the public of the
hearing before the Commission pursuant to G.S. 62‑133.9(d) and setting
forth the time and the place of the hearing.

(4) Persons having an interest in any hearing
may file a petition to intervene at least 15 days prior to the date of the
hearing. Petitions to intervene filed less than 15 days prior to the date of
the hearing may be allowed in the discretion of the Commission for good cause
shown.

(5) The Public Staff and other intervenors
shall file direct testimony and exhibits of expert witnesses at least 15 days
prior to the hearing date. If a petition to intervene is filed less than 15
days prior to the hearing date, it shall be accompanied by any direct testimony
and exhibits of expert witnesses the intervenor intends to offer at the
hearing.

(6) The electric public utility may file
rebuttal testimony and exhibits of expert witnesses no later than 5 days prior
to the hearing date.

(3) "Acquisition costs" means the
amount paid by an electric public utility on or before December 31, 2016, to
acquire the proportional ownership interest in electric generating facilities
from a joint agency, including the amount paid above the net book value of the
generating facilities. Acquisition costs include the amounts recorded by the
joint agency in its accounting records for plant, accumulated depreciation, net
nuclear fuel, spare parts, fuel and materials and supplies inventories,
construction work in progress, and any other items related to the acquired
plant, plus the amount paid by an electric public utility above the net book
value of the generating facilities.

(4) "Financing costs" means the debt
and equity return on the electric public utility's average rate base investment
determined using the weighted average net of tax cost of capital as authorized
by the Commission in the electric public utility's most recent general rate
case, including gross-up for income taxes.

(5) "Joint agency" means a joint
agency established under Chapter 159B of the General Statutes.

(6) "Levelized" means an even amount
of revenue requirement over a period of time that is equivalent to the present
value of the stream of revenue requirements that would be determined for the
same period of time based upon the declining book value of the items subject to
the levelization. The return to be used in the present value calculations is
based on the net of tax rate of return authorized by the Commission in the
utility's last general rate case.

(8) "Joint Agency Asset rider" means
a charge or rate established by the Commission annually pursuant to G.S.
62-133.14 to allow an electric public utility to recover the North Carolina
retail portion of all reasonable and prudent costs incurred by the electric
public utility to acquire, operate and maintain the acquired plant, as well as
reasonable and prudent financing costs and non-fuel operating costs related to
capital investments in the acquired plant.

(9) "Rate period" means the period
during which the Joint Agency Asset rider established under this rule will be
in effect. For each public utility, this period will be the same as the period
during which the rider established under Rule R8-55 is in effect, unless
otherwise ordered by the Commission.

(10) "Test period" shall be the
calendar year that precedes the end of the test period for each electric public
utility for purposes of Rule R8-55, unless otherwise ordered by the Commission.

(b) Recovery of Costs.

(1) In determining the amount of the Joint
Agency Asset rider, the Commission shall include the following:

i. The financing costs and depreciation and
amortization expenses associated with the acquired plant, including the amount
paid over book value, levelized over the remaining useful life of the electric
generating facilities. The remaining useful life will be determined at the time
of the acquisition.

ii. The financing costs associated with coal
inventory and the acquisition costs not included in amounts being levelized in
(b)(1)(i), including net nuclear fuel, fuel inventory, and materials and
supplies inventory, but excluding construction work in progress.

iii. The estimated non-fuel operating costs for the
acquired plant, not recovered through (b)(1)(i), based on the experience of the
test period and the costs projected for the next 12 month rate period.

iv. The estimated financing costs and non-fuel
operating costs associated with the reasonable and prudent proportional capital
investments including allowance for funds used during construction (AFUDC) in
the acquired plant that are placed in service subsequent to the acquisition
date.

v. Adjustments to reflect changes in the North
Carolina retail portion of financing and non-fuel operating costs related to
the electric public utility's other used and useful generating facilities owned
at the time of the acquisition to properly account for changes in the
jurisdictional allocation factors that result from the addition of the joint
agency to the load served by those other facilities.

vi. A Joint Agency Asset rolling recovery factor
(Joint Agency Asset RRF) to reflect the under or over recovery balance. The
electric public utility will maintain an under or over recovery balance and add
to the balance the difference between the reasonable and prudent financing and
non-fuel operating costs incurred by the electric public utility during the
test period and the revenues to recover these costs during the test period that
were actually realized.

vii. Upon request by the electric public utility, the
experienced under or over recovery of financing and non-fuel operating costs
incurred after the test period and up to thirty (30) days prior to the date of
the hearing in its determination of the Joint Agency Asset rider, provided that
the reasonableness and prudence of these costs shall be subject to review in
the utility's next annual Joint Agency Asset rider hearing.

(2) In determining cost recovery allocation,
the Commission shall utilize the jurisdictional and customer class allocation methodology
used in the electric public utility's most recent general rate case.

(3) Each electric public utility shall utilize
deferral accounting for costs considered for recovery through the Joint Agency
Asset rider. The balance in the deferral account, net of tax, shall accrue a
monthly return at the net-of-tax rate of return, grossed up for income taxes,
as approved in the electric public utility's most recent general rate
proceeding.

(4) The provisions of this Rule shall not
relieve the Commission of its responsibility to determine the reasonableness
and prudence of the cost of capital additions or operating costs incurred
related to the acquired plant in a general rate proceeding.

(5) The burden of proof as to the correctness,
reasonableness, and prudence of the cost of capital additions or operating
costs sought to be included in the Joint Agency Asset rider, including the
Joint Agency Asset RRF, shall be on the electric public utility.

(c) Annual Proceeding.

(1) Each year the Commission shall hold a
hearing pursuant to G.S. 62‑133.14 to establish an annual Joint Agency
Asset rider for the applicable electric public utility.

(2) The annual rider hearing will be scheduled
as soon as practicable after the hearing held by the Commission for the electric
public utility under Rule R8‑55. Each electric public utility shall
file its application for recovery of costs under this Rule at the same time
that it files the information required by Rule R8-55.

(3) After the initial establishment, the Joint
Agency Asset rider will remain in effect, subject to annual updates as provided
in this rule, until the end of the useful life of the acquired plant, with any
remaining unrecovered costs deferred until the electric public utility's next
general rate proceeding.

(d) Initial Rider.

(1) For the initial filing to establish the
Joint Agency Asset rider pursuant to this rule, the electric public utility
shall submit an application no later than 60 days after the date of acquisition
containing such information as the Commission may require to recover all
estimated financing and non-fuel operating costs which the utility expects to
incur during the period from the date of acquisition until the effective date
of the rates approved by the Commission in the Company's next annual Joint
Agency Asset Rider. After hearing, the Commission shall approve an initial
Joint Agency Asset rider to the electric public utility's rates.

(2) The initial filing should include a special
fuel rider to be implemented on the same date as the initial Joint Agency Asset
rider that reflects the estimated fuel savings to be experienced by the utility
when the purchased Joint Agency assets are included in the utility's system
fuel costs. This special fuel rider is eliminated at the effective date of the
implementation of a fuel cost rate per Rule R8-55 which reflects a system fuel
costs including the acquired plant assets.

(e) Filing Requirements and Procedure.

(1) The electric public utility filing proposed
adjustments to the Joint Agency Asset rider shall submit to the Commission the
following information:

i. The deferred balance at the beginning of the test
year plus any under or over recovery resulting from the operation of the Joint
Agency Asset rider during the test period.

ii. Any rate changes necessary to recover costs
forecasted for the rate period.

iii. The weighted average cost of capital as
authorized by the Commission in the electric public utility's most recent
general rate case, grossed-up for income taxes and Commission regulatory fee,
applicable to the test period and rate period, after the initial establishment
of the rider. This weighted average cost of capital should be applied to both
the remaining acquisition costs and any additional capital investment placed in
service made by the electric utility in the acquired electric generating
facilities.

iv. Any changes to the customer allocation methodology
determined in any general rate proceeding of the electric public utility
occurring after the initial establishment of the rider.

v. The acquisition costs of the generating facilities
and accumulated depreciation and amortization reserve as of the end of the test
period.

vi. For each of the first ten years of the rider, the
total test period fuel savings for the North Carolina retail jurisdiction, by
customer class, arising as a result of the electric public utility's
acquisition of the acquired plant.

(2) The Commission shall require the electric
public utility to file a monthly report, which shall contain such information
as may be agreed to by the Public Staff and the electric public utility and
approved by the Commission.

(f) The electric public utility shall publish notice for
two (2) successive weeks in a newspaper or newspapers having general
circulation in its service area, normally beginning at least 30 days prior to
the hearing, notifying the public of the hearing before the Commission pursuant
to G.S. 62-133.14 and setting forth the time and place of hearing.

(g) If the Commission has not issued an Order within 180
days after the electric utility has filed the proposed changes under this rule,
then the electric utility may place such proposed changes into effect, subject
to later refund of any amount collected plus interest that the Commission might
determine to be in excess of the amount ultimately approved by the Commission.

(NCUC Docket No. E-100, Sub
144, 7/8/2015.)

Rule R8-71 COMPETITIVE PROCUREMENT OF RENEWABLE
ENERGY.

(a) Purpose. - The purpose of this rule is to implement the
provisions of G.S. 62‑110.8, and to provide for Commission oversight of
the CPRE Program(s) designed by the electric public utilities subject to G.S.
62‑110.8 for the competitive procurement and development of renewable
energy facilities in a manner that ensures continued reliable and
cost-effective electric service to customers in North Carolina.

(b) Definitions.

(1) "Affiliate" is defined as
provided in G.S. 62‑126.3(1).

(2) "Avoided cost rates" – means an
electric public utility's calculation of its long-term, levelized avoided
energy and capacity costs utilizing the methodology most recently approved or
established by the Commission as of 30 days prior to the date of the electric
public utility's upcoming CPRE RFP Solicitation for purchases of electricity
from qualifying facilities pursuant to Section 210 of the Public Utility
Regulatory Policies Act of 1978, as amended. The electric public utility's
avoided cost rates shall be used for purposes of determining the cost
effectiveness of renewable energy resources procured through a CPRE RFP
Solicitation. With respect to each CPRE RFP Solicitation, the electric public
utility's avoided costs shall be calculated over the time period of the
utility's pro forma contract(s) approved by the Commission.

(4) "CPRE Program Methodology" means
the methodology used to evaluate all proposals received in a given CPRE RFP
Solicitation.

(5) "CPRE Program Procurement Period"
means the initial 45-month period in which the aggregate 2,660 MW of renewable
energy resource nameplate capacity is required to be procured under the CPRE
Program(s) approved by the Commission.

(6) "CPRE RFP Solicitation" means a
request for proposal solicitation process to be followed by the electric public
utility under this Rule for the competitive procurement of renewable energy
resource capacity pursuant to the utility's CPRE Program.

(7) "Evaluation Team" means employees
and agents of an electric public utility that will be evaluating proposals
submitted in response to the CPRE RFP Solicitation, including those acting for
or on behalf of the electric public utility regarding any aspect of the CPRE
RFP Solicitation evaluation or selection process.

(8) "IA Website" means the website
established and maintained by the Independent Administrator as required by
subsection (d)(7) of this Rule.

(9) "Independent Administrator" means
the third-party entity to be approved by the Commission that is responsible for
independently administering the CPRE Program in accordance with G.S. 62-110.8
and this rule, developing and publishing the CPRE Program Methodology, and for
ensuring that all responses to a CPRE RFP Solicitation are treated equitably.

(10) "Electric public utility" means an
electric public utility that is required to comply with the requirements of
G.S. 62-110.8.

(11) "Market participant" means a
person who has expressed interest in submitting a proposal in response to a
CPRE RFP Solicitation or has submitted such a proposal, including, unless the
context requires otherwise, an Affiliate or an electric public utility, through
its Proposal Team.

(12) "Proposal Team" means employees
and agents of an electric public utility or an Affiliate that proposes to meet
a portion of its CPRE Program requirements as provided in G.S. 62-110.8(b)(i)
or (ii), which is more particularly described as a "Self-developed
Proposal" in subsection (f)(2)(iv) of this rule, who directly support the
Self-developed Proposal.

(14) "Renewable energy facility" means
an electric generating facility that uses renewable energy resource(s) as its
primary source of fuel, has a nameplate capacity rating of 80 MW or less, and
is placed into service after the beginning of the CPRE Program Procurement
Period.

(15) "Renewable energy resource" is as
defined as provided in G.S. 62‑133.8(a)(8).

(c) Initial CPRE Program Filings and Program Guidelines

(1) Each electric public utility shall develop
and seek Commission approval of guidelines for the implementation of its CPRE
Program and to inform market participants regarding the terms and conditions
of, and process for participating in, the CPRE Program. The electric public
utility shall file its initial CPRE Program guidelines at the time it initially
proposes a CPRE Program for Commission approval. The CPRE Program guidelines
should, at minimum, include the following:

(i) Planned allocation between the electric public
utilities of the 2,660 MW required to be procured during the CPRE Program
Procurement Period;

(ii) Proposed timeframe for each electric public
utility's initial CPRE RFP Solicitation(s) and planned initial procurement
amount, as well as plans for additional CPRE RFP Solicitation(s) during the
CPRE Program Procurement Period;

(iv) Proposed evaluation factors, including economic and
noneconomic factors, for the evaluation of proposals submitted in response to
CPRE RFP Solicitation(s); and

(v) Pro forma contract(s) to be utilized in the CPRE
Program.

(2) At the time an electric public utility
files its proposed CPRE Program guidelines with the Commission, it shall also
identify any regulatory conditions and/or provisions of the electric public
utility's code of conduct that the electric public utility seeks to waive for
the duration of the CPRE Program Procurement Period pursuant to G.S. 62‑110.8(h)(2).

(d) Selection and Role of Independent Administrator.

(1) In advance of the filing the initial CPRE
Program required by subsection (c) of this Rule, the Commission shall invite
and consider comments and recommendations from the electric public utilities,
the Public Staff, and other interested persons, including market participants,
regarding the selection of the Independent Administrator. In addition to the
requirements in this Rule, the Commission may establish additional minimum
qualifications and requirements for the Independent Administrator.

(2) Any person requesting to be considered for
approval as the Independent Administrator shall be required to disclose any
financial interest involving the electric public utilities implementing CPRE Programs
or any market participant, including, but not limited to, all substantive
assignments for electric public utilities, Affiliate(s), or market participant
during the preceding three (3) years.

(3) In advance of the initial CPRE RFP
Solicitation(s), the Commission shall select and approve the Independent
Administrator. From the date the Independent Administrator is selected, no
market participant shall have any communication with the Independent
Administrator or the electric public utility pertaining to the CPRE RFP
Solicitation, the RFP documents and process, or the evaluation process or any
related subjects, except as those communications are specifically allowed by
this rule.

(4) The Independent Administrator will be
retained by the electric public utility or jointly by the electric public
utilities for the duration of the CPRE Program Procurement Period under a
contract to be filed with the Commission at least sixty (60) days prior to the
public utilities' initial CPRE RFP Solicitation(s). The Independent
Administrator shall remain subject to ongoing Commission oversight as part of
the Commission's review of the electric public utilities' annual CPRE Program
Compliance Reports.

(5) The Independent Administrator's duties
shall include:

(i) Monitor compliance with CPRE Program requirements.

(ii) Review and comment on draft CPRE Program filings,
plans, and other documents.

(iii) Facilitate and monitor permissible communications
between the electric public utilities' Evaluation Team and other participants
in the CPRE RFP solicitations.

(iv) Develop and publish the CPRE Program Methodology
that shall ensure equitable review between an electric public utility's Self‑developed
Proposal(s) as addressed in subsection (f)(2)(iv) and proposals offered by
third-party market participants.

(ix) Provide an independent certification to the
Commission in the CPRE Compliance Report that all electric public utility and
third party proposals were evaluated under the published CPRE Program
methodology and that all proposals were treated equitably through the CPRE RFP
Solicitation(s).

(6) Prior to the initial CPRE RFP Solicitation,
but on or before the date determined by Commission order, Independent
Administrator shall develop and publish the CPRE Program Methodology. Prior to
developing and publishing the CPRE Program Methodology, the Independent
Administrator shall meet with the Evaluation Team(s) to share evaluation
techniques and practices. The Independent Administrator shall also meet with
the Evaluation Team(s) at least 60 days prior to each subsequent CPRE RFP
Solicitation to discuss the efficacy of the CPRE Program Methodology and
whether changes to the CPRE Program Methodology may be appropriate based upon
the anticipated contents of the next CPRE RFP Solicitation. If the CRPE RFP
Solicitation allows for electric public utility self-build options or Affiliate
proposals, the Independent Administrator shall ensure that if any non-publicly
available transmission or distribution system information is used in preparing
proposals by the electric public utility or Affiliate(s), such information is
made available to third parties that notified the Independent Administrator or
their intent to submit a proposal in response to the that CPRE RFP
Solicitation.

(7) The Independent Administrator shall
maintain the IA Website to support administration and implementation of the
CPRE Program and shall post the CPRE RFP Solicitation documents, the CPRE
Program Methodology, participant FAQs, and any other pertinent documents on the
IA Website.

(8) In carrying out its duties, the Independent
Administrator shall work in coordination with the Evaluation Team(s) with
respect to CPRE Program implementation and the CPRE RFP Solicitation proposal
evaluation process in the manner and to the extent as more specifically
provided in subsection (f) of this rule.

(9) If the Independent Administrator becomes
aware of a violation of any CPRE Program requirements, the Independent
Administrator shall immediately report that violation, together with any
recommended remedy, to the Commission.

(10) The Independent Administrator's fees shall
be funded through reasonable proposal fees collected by the electric public
utility. The electric public utility shall be authorized to collect proposal
fees up to $10,000 per proposal to defray its costs of evaluating the
proposals. In addition, the electric public utility may charge each participant
an amount equal to the estimated total cost of retaining the Independent
Administrator divided by the reasonably anticipated number of proposals. To the
extent that insufficient funds are collected through these methods to pay of
the total cost of retaining the Independent Administrator, the electric public
utility shall pay the balance and subsequently charge the winning participants
in the CPRE RFP Solicitation.

(e) Communications Between CPRE Market Participants.

(1) From the date an electric public utility
announces a CPRE RFP Solicitation, until the Independent Administrator declares
the CPRE RFP Solicitation closed, there shall be no communications between
market participants regarding the substantive aspects of their proposals or
between the electric public utility and market participants. Such
communications shall be conducted through the Independent Administrator as
permitted by this subsection.

(2) The Evaluation Team or the Independent
Administrator may request further information from any market participant
regarding its proposal during the process of evaluating and selecting proposals.
These communications shall be conducted through the Independent Administrator
and shall be conducted in a manner that keeps confidential the identity of the
market participant.

(3) On or before the date an electric public
utility announces a CPRE RFP Solicitation, the Proposal Team shall be
separately identified and physically segregated from the Evaluation Team for
purposes of all activities that are part of the CPRE RFP Solicitation process.
The names and job titles of each member of the Proposal Team and the Evaluation
Team shall be reduced to writing and submitted to the Independent
Administrator.

(4) There shall be no communications, either
directly or indirectly, between the Proposal Team and Evaluation Team during
the CPRE RFP Solicitation regarding any aspect of the CPRE RFP Solicitation process,
except (i) necessary communications as may be made through the Independent
Administrator and (ii) negotiations between the Proposal Team and the
Evaluation Team for a final power purchase agreement after the Proposal Team
has been selected by the electric public utility as a winning proposal. The
Evaluation Team will have no direct or indirect contact or communications with
the Proposal Team or any other participant, except through the Independent Administrator
as described further herein, until such time as a winning proposal or proposals
are selected by the electric public utility and negotiations for a final power
purchase agreement(s) have begun.

(5) At no time shall any information regarding
the CPRE RFP Solicitation process be shared with any market participant,
including the Proposal Team, unless the information is shared with all
competing participants contemporaneously and in the same manner.

(6) Within fifteen (15) days of the date an
electric public utility announces a planned CPRE RFP Solicitation, each member
of the Proposal Team shall execute an acknowledgement that he or she agrees to
abide by the restrictions and conditions contained in subsection (e) of this
rule for the duration of the CPRE RFP Solicitation. If the Proposal Team's
proposal is selected by the electric public utility after completion of the
CPRE RFP Solicitation, each member of the Proposal Team shall then also execute
an acknowledgement that he or she has met the restrictions and conditions
contained in subsection (e) of this rule. The electric public utility shall
provide these acknowledgements to the Independent Administrator and shall file
the acknowledgements with the Commission in support of its annual CPRE Compliance
Report.

(7) Should any participant, including an
Affiliate or electric public utility's Proposal Team, attempt to contact a
member of the Evaluation Team directly, such participant shall be directed to
the Independent Administrator for all information and such communication shall
be reported to the Independent Administrator by the Evaluation Team member.
Within ten (10) days of the date that the Independent Administrator issues the
CPRE RFP Solicitation, each Evaluation Team member shall execute an acknowledgement
that he or she agrees to abide by the conditions contained in subsection (e) of
this rule for the duration of the CPRE RFP Solicitation. If the Proposal Team's
proposal is selected by the electric public utility after completion of the
CPRE RFP Solicitation, the Evaluation Team shall also execute an
acknowledgement that he or she has met the restrictions and conditions
contained in subsection (e)(3)-(5) above. The electric public utility shall
provide these acknowledgements to the Independent Administrator and shall file
the acknowledgements with the Commission in support of its annual CPRE
Compliance Report.

(i) Prior to the initial CPRE RFP Solicitation, the
electric public utility shall provide the Independent Administrator with a list
of potential market participants that have expressed interest, in writing, in
participating in the CPRE RFP Solicitation or have participated in recent
renewable energy resource solicitations issued by the electric public
utilities. The Independent Administrator shall publish notice of the draft CPRE
RFP Solicitation on the IA Website, and prepare the list of potential
participants to whom notice of the upcoming CPRE RFP Solicitation will be sent.

(ii) The electric public utility shall prepare an
initial draft of the CPRE RFP Solicitation guidelines and documents, including
RFP procedures, evaluation factors, credit and security obligations, a pro
forma power purchase agreement, the Avoided Cost Rate against which proposals
will be evaluated, and a planned schedule for completing the CPRE RFP
Solicitation and selecting winning proposals. No later than sixty (60) days
prior to the planned issue date of the CPRE RFP Solicitation, the electric
public utility shall provide the initial draft of the CPRE RFP Solicitation
guidelines and documents to the Independent Administrator for posting on the IA
Website.

(iii) The evaluation factors included in the CPRE RFP
Solicitation guidelines shall identify all economic and noneconomic factors to
be considered by the Independent Administrator in its evaluation of proposals.
In addition to the guidelines, a pro forma power purchase agreement containing
all expected material terms and conditions shall be included in the CPRE RFP
Solicitation documents provided to the Independent Administrator and shall be
filed with the Commission at least thirty (30) days prior to the planned CPRE
RFP solicitation issuance date.

(iv) The Independent Administrator, in coordination with
the electric public utility, may conduct a pre-issuance market participants'
conference to publicly discuss the draft CPRE RFP Solicitation guidelines and
documents with market participants. Market participants may submit written
questions or recommendations to the Independent Administrator regarding the
draft CPRE RFP Solicitation guidelines and documents in advance of the market
participants' conference. All such questions and recommendations shall be
posted on the IA Website. The Independent Administrator shall have no private
communication with any potential participants regarding any aspect of the draft
CPRE RFP Solicitation documents.

(v) Based on the input received from potential
participants, and on its own review of the draft CPRE RFP Solicitation
documents, the Independent Administrator shall submit a report to the electric
public utility, at least twenty (20) days prior to the planned CPRE RFP
Solicitation issuance date, detailing market participants' comments and the
Independent Administrator's recommendations for changes to the CPRE RFP
Solicitation documents, if any. This report shall also be posted on the IA
Website for review by potential participants.

(vi) At least five (5) days prior to the planned CPRE
RFP Solicitation issuance date, the electric public utility shall submit its
final version of the CPRE RFP Solicitation documents to the Independent
Administrator to be posted on the IA Website.

(vii) At any time after the CPRE RFP Solicitation is
issued, through the time winning proposals are selected by the electric public
utility, the schedule for the solicitation may be modified upon mutual
agreement of the electric public utility and the Independent Administrator,
with equal notice provided to all market participants, or upon approval by the
Commission. Any modification to the CPRE RFP Solicitation schedule will be
posted to the IA Website.

(2) Issuance of CPRE RFP Solicitation.

(i) The Independent Administrator shall transmit the
final CPRE RFP Solicitation to the market participants via the IA Website. Upon
issuance of the final CPRE RFP Solicitation, the only communications permitted
prior to submission of proposals shall be conducted through the Independent
Administrator. Participants' questions and the Independent Administrator's
responses shall be posted on the IA Website, but, to the extent possible, shall
be posted in a manner that the identity of the participant remains
confidential. To the extent such questions and responses contain competitively
sensitive information that a particular participant deems to be a trade secret,
this information may be redacted by the participant.

(ii) The electric public utility shall not communicate
with any market participant regarding the RFP Process, the content of the CPRE
RFP Solicitation documents, or the substance of any potential response by a
participant to the RFP; provided, however, the electric public utility shall
provide timely, accurate responses to the Independent Administrator's request
for information regarding any aspect of the CPRE RFP Solicitation documents or
the CPRE RFP Solicitation process.

(iii) Participants shall submit proposals pursuant to
the solicitation schedule contained in the CPRE RFP Solicitation, and in the
format required by the Independent Administrator to facilitate the evaluation
and selection of proposals. The Independent Administrator shall have access to
all proposals and all supporting documentation submitted by market participants
in the course of the CPRE RFP Solicitation process.

(iv) If the electric public utility wishes to consider
an option for full or partial ownership of a renewable energy facility as part
of the CPRE RFP solicitation, the utility must submit its construction proposal
(Self‑developed Proposal) to provide all or part of the capacity
requested in the CPRE RFP solicitation to the Independent Administrator at the
time all other proposals are due. Once submitted, the Self-developed Proposal
may not be modified, except in the event that the electric public utility
demonstrates to the satisfaction of the Independent Administrator that the
Self-developed Proposal contains an error and that correction of the error will
not be unduly harmful to the other market participants, the electric public
utility may correct the error. Persons who have participated or assisted in the
preparation of the Self‑developed Proposal on behalf of the electric
public utility's Proposal Team in any way may not be a member of the
Affiliate's Proposal Team, nor communicate with the Affiliate's Proposal Team
during the RFP Process about any aspect of the RFP Process.

(3) Evaluation and Selection of Proposals. The
evaluation and selection of proposals received in response to a CPRE RFP
Solicitation shall proceed in two steps as set forth in this subdivision, and
shall be subject to the Commission's oversight as provided in G.S. 62-110.8 and
this rule.

(i) In step one, the Independent Administrator shall
evaluate all proposals based upon the CPRE RFP Solicitation evaluation factors
using the CPRE Program Methodology. The Independent Administrator shall conduct
this evaluation in an appropriate manner designed to ensure equitable review of
all proposals based on the economic and noneconomic factors contained in the
CPRE RFP Solicitation evaluation factors. As a result of the Independent
Administrator's evaluation, the Independent Administrator shall eliminate
proposals that fail to meet the CPRE RFP Solicitation evaluation factors and
shall develop and deliver to the electric public utility a list of proposals
ranked in order from most competitive to least competitive. The Independent
Administrator shall redact from the proposals any information that identifies
the market participant that submitted the proposal and any information in the
proposal that is not reasonably necessary for the utility to complete step two
of the evaluation process, including economic factors such as cost and pricing
information.

(ii) In step two, the electric public utility shall
select the proposals in the order ranked by the Independent Administrator until
the total generating capacity sought in the CPRE RFP Solicitation is satisfied,
provided, however, that if the electric public utility determines that the
interconnection and operation of a proposed facility, together with a facility
or multiple facilities that were the subject of proposal(s) already selected by
the utility, would significantly undermine the utility's ability to provide
adequate and reliable electric service to its customers, then the electric
public utility may eliminate such proposal(s) from further consideration. The
electric public utility shall notify the Independent Administrator of the
proposals it has selected and those it has eliminated, if any. If the electric
public utility eliminates proposal(s), it shall provide to the Independent
Administrator a short and plain explanation of why each proposal was eliminated
at the same time that the utility notifies the Independent Administrator of the
proposals it has selected.

(iii) Upon receipt of notification of proposals selected
by the electric public utility, the Independent Administrator shall provide the
electric public utility with the identity of the market participants that
submitted proposals selected and shall publish the list of proposals selected
and the utility's explanation(s) for eliminating proposal(s), if any. Upon
publication of the list of proposals selected and the utility's explanation(s),
if any, the Independent Administrator shall declare the CPRE RFP Solicitation
closed.

(iv) The electric public utility shall proceed to
execute contracts with each of the market participants who submitted a proposal
that was selected.

(g) CPRE Program Plan.

(1) Each electric public utility shall file its
initial CPRE Program plan with the Commission at the time initial CPRE Program
Guidelines are filed under subsection (c) and thereafter shall be filed on or
before September 1 of each year. The electric public utility may file its CPRE
Program plan as part of its future biennial integrated resource plan filings,
or update thereto, and the CPRE Program plan filed pursuant to this rule will
be reviewed in the same docket as the electric public utility's biennial
integrated resource plan or update filing.

(2) Each year, beginning in 2018, each electric
public utility shall file with the Commission an updated CPRE Program plan
covering the remainder of the CPRE Program Procurement Period. At a minimum,
the plan shall include the following information:

(i) an explanation of whether the electric public
utility is jointly or individually implementing the aggregate CPRE Program
requirements mandated by G.S. 62-110.8(a);

(ii) a description of the electric public utility's
planned CPRE RFP Solicitations and specific actions planned to procure
renewable energy resources during the CPRE Program planning period;

(iii) an explanation of how the electric public utility
has allocated the amount of CPRE Program resources projected to be procured
during the CPRE Program Procurement Period relative to the aggregate CPRE
Program requirements;

(iv) if designated by location, an explanation of how
the electric public utility has determined the locational allocation within its
balancing authority area;

(v) an estimate of renewable energy generating capacity
that is not subject to economic dispatch or economic curtailment that is under
development and projected to have executed power purchase agreements and
interconnection agreements with the electric public utility or that is
otherwise projected to be installed in the electric public utility's balancing
authority area within the CPRE Program planning period; and

(vi) a copy of the electric public utility's CPRE
Program guidelines then in effect as well as a pro forma power purchase
agreement used in its most recent CPRE RFP Solicitation.

(3) Upon the expiration of the CPRE Program
Procurement Period, the electric public utility shall file a CPRE Program Plan
in the following calendar year identifying any additional CPRE Program
procurement requirements, as provided for in G.S. 62‑110.8(a).

(4) In any year in which an electric public
utility determines that it has fully complied with the CPRE Program
requirements set forth in G.S. 62‑110.8(a), the electric public utility
shall notify the Commission in its CPRE Program Plan, and may petition the
Commission to discontinue the CPRE Program Plan filing requirements beginning
in the subsequent calendar year.

(h) CPRE Program Compliance Report.

(1) Each electric public utility shall file its
annual CPRE Program compliance report, together with direct testimony and
exhibits of expert witnesses, on the same date that it files its application to
recover costs pursuant to subsection (j) of this rule. The Commission shall
consider each electric public utility's CPRE Program compliance report at the
hearing provided for in subsection (j) and shall determine whether the electric
public utility is in compliance with the CPRE Program requirements of G.S.
62-110.8.

(2) Beginning in 2019, and each year
thereafter, each electric public utility shall file with the Commission a
report describing the electric public utility's competitive procurement of
renewable energy resources under its CPRE Program and ongoing actions to comply
with the requirements of G.S. 62‑110.8 during the previous calendar year,
which shall be the "reporting year." The report shall include the
following information, including supporting documentation:

(i) a description of CPRE RFP Solicitation(s)
undertaken by the electric public utility during the reporting year, including
an identification of each proposal eliminated pursuant to subsection (f)(3)(ii)
of this rule and an explanation of the utility's basis for elimination of each
proposal;

(ii) a description of the sources, amounts, and costs
of third-party power purchase agreements and proposed authorized revenues for
utility‑owned assets for renewable energy resources procured through CPRE
RFP Solicitation(s) during the reporting year, including the dates of all CPRE
Program contracts or utility commitments to procure renewable energy resources
during the reporting year;

(iii) the forecasted nameplate capacity and
megawatt-hours of renewable energy and the number of renewable energy
certificates obtained through the CPRE Program during the reporting year;

(iv) identification of all proposed renewable energy
facilities under development by the electric public utility that were proposal
into a CPRE RFP Solicitation during the reporting year, including whether any
non-publicly available transmission or distribution system operations
information was used in preparing the proposal, and, if so, an explanation of
how such information was made available to third parties that notified the
utility of their intention to submit a proposal in the same CPRE RFP
Solicitation;

(v) the electric public utility's avoided cost rates
applicable to the CPRE RFP Solicitation(s) undertaken during the reporting year
and confirmation that all renewable energy resources procured through a CPRE
RFP Solicitation are priced at or below the electric public utility's avoided
cost rates;

(vi) the actual total costs and authorized revenues
incurred by the electric public utility during the calendar year to comply with
G.S. 62‑110.8;

(vii) the status of the electric public utility's
compliance with the aggregate CPRE Program procurement requirements set forth
in G.S. 62‑110.8(a);

(viii) a copy of the contract then in effect between the
electric public utility and Independent Administrator, supporting information
regarding the administrative fees collected from participants in the CPRE RFP
Solicitation during the reporting year, as well as any cost incurred by the
electric public utility during the reporting year to implement the CPRE RFP
Solicitation; and

(ix) certification by the Independent Administrator that
all public utility and third-party proposal responses were evaluated under the
published CPRE Program Methodology and that all proposals were treated
equitably through the CPRE RFP Solicitation(s) during the reporting year.

(i) Compliance with CPRE Program Requirements.

(1) An electric public utility shall be in
compliance with the CPRE Program requirements during a given year where the
Commission determines that the electric public utility's CPRE Program plan is
reasonably designed to meet the requirements of G.S. 62-110.8 and, based on the
utility's most recently filed CPRE Program compliance report, that the electric
public utility is reasonably and prudently implementing the CPRE Program
requirements.

(2) An electric public utility, or other interested
party, may petition the Commission to modify or delay the provisions of G.S. 62‑110.8
in whole or in part. The Commission shall allow a modification or delay upon
finding that it is in the public interest to do so.

(3) Renewable energy certificates purchased or
earned by an electric public utility while complying with G.S. 62‑110.8
must have been earned after January 1, 2018, and may be retired to meet an
electric public utility's REPS compliance obligations under G.S. 62‑133.8.

(4) The owner of any renewable energy facility
included as part of a proposal selected through a CPRE RFP Solicitation shall
register the facility as a new renewable energy facility under Rule R8-66 no
later than 60 calendar days from receiving written notification that the facility
was included as part of a proposal selected and shall participate in the North
Carolina Renewable Energy Tracking System (NC-RETS) to facilitate the issuance
or importation of renewable energy certificates contracted for under the CPRE
Program.

(j) Cost or authorized revenue recovery.

(1) Beginning in 2018, for each electric public
utility, the Commission shall schedule an annual public hearing pursuant to
G.S. 62‑110.8(g) to review the costs incurred or anticipated to be
incurred by the electric public utility to comply with G.S. 62‑110.8. The
annual rider hearing for each electric public utility will be scheduled as soon
as practicable after the hearing held by the Commission for the electric public
utility under Rule R8-55.

(2) The Commission shall permit each electric
public utility to charge an increment or decrement as a rider to its rates to
recover in a timely manner the reasonable and prudent costs incurred and
anticipated to be incurred to implement its CPRE Program and to comply with G.S.
62‑110.8. In any application for cost recovery and collection of
authorized revenues wherein the utility proposes to recover costs or collect
revenues attributable to a utility‑owned renewable energy facility
calculated on a market basis, in lieu of a cost‑of‑service basis,
the utility shall support its application with testimony specifically
addressing the calculation of those costs and revenues sufficient to
demonstrate that recovery on a market basis is in the public interest.

(3) Unless otherwise ordered by the Commission,
the test period for each electric public utility shall be the same as its test
period for purposes of Rule R8-55.

(4) Rates set pursuant to this section shall be
recovered during a fixed recovery period that shall coincide, to the extent
practical, with the recovery period for the cost of fuel and fuel-related cost
rider established pursuant to Rule R8-55.

(5) The costs and authorized revenue will be
further modified through the use of a CPRE Program experience modification
factor (CPRE EMF) rider. The CPRE EMF rider will reflect the difference between
reasonable and prudently-incurred CPRE Program projected costs, authorized
revenue, and the revenues that were actually realized during the test period
under the CPRE Program rider then in effect. Upon request of the electric
public utility, the Commission shall also incorporate in this determination the
experienced over-recovery or under-recovery of the costs and authorized revenue
up to 30 days prior to the date of the hearing, provided that the
reasonableness and prudence of these costs and authorized revenues shall be
subject to review in the utility's next annual CPRE Program cost recovery
hearing.

(6) The CPRE EMF rider will remain in effect
for a fixed 12-month period following establishment and will carry through as a
rider to rates established in any intervening general rate case proceedings.

(7) Pursuant to G.S. 62-130(e), any
over-collection of reasonably and prudently-incurred costs and authorized
revenues to be refunded to an electric public utility's customers through
operation of the CPRE EMF rider shall include an amount of interest, at such
rate as the Commission determines to be just and reasonable, not to exceed the
maximum statutory rate.

(8) Each electric public utility shall follow
deferred accounting with respect to the difference between actual reasonably
and prudently-incurred costs or authorized revenue and related revenues
realized under rates in effect.

(9) The annual increase in the aggregate amount
of costs recovered under G.S. 62-110.8(g) in any recovery period from its North
Carolina retail customers shall not exceed one percent (1%) of the electric
public utility's total North Carolina retail jurisdictional gross revenues for
the preceding calendar year determined as of December 31 of the previous
calendar year. Any amount in excess of that limit shall be carried over and
recovered in the next recovery period when the annual increase in the aggregate
amount of costs to be recovered is less than one percent (1%).

(10) Each electric public utility, at a minimum,
shall submit to the Commission for purposes of investigation and hearing the
information required for the CPRE Program compliance report for the 12-month
test period established in subsection (3) consistent with Rule R8-55,
accompanied by supporting workpapers and direct testimony and exhibits of
expert witnesses, and any change in rates proposed by the electric public
utility at the same time that it files the information required by Rule R8-55.

(11) The electric public utility shall publish a
notice of the annual hearing for 2 successive weeks in a newspaper or
newspapers having general circulation in its service area, normally beginning
at least 30 days prior to the hearing, notifying the public of the hearing
before the Commission pursuant to G.S. 62-110.8(g) and setting forth the time
and place of the hearing.

(12) Persons having an interest in said hearing
may file a petition to intervene setting forth such interest at least 15 days
prior to the date of the hearing. Petitions to intervene filed less than 15
days prior to the date of the hearing may be allowed at the discretion of the
Commission for good cause shown.

(13) The Public Staff and intervenors shall file
direct testimony and exhibits of expert witnesses at least 15 days prior to the
hearing date. If a petition to intervene is filed less than 15 days prior to
the hearing date, it shall be accompanied by any direct testimony and exhibits
of expert witnesses the intervenor intends to offer at the hearing.

(14) The electric public utility may file
rebuttal testimony and exhibits of expert witnesses no later than 5 days prior
to the hearing date.

(15) The burden of proof as to whether CPRE
Program-related costs or authorized revenues to be recovered under this section
were reasonable and prudently-incurred shall be on the electric public utility.

(k) Expedited review and approval of Certificate of Public
Convenience and Necessity for renewable energy facilities owned by an electric
public utility and procured under the CPRE Program.

(1) Scope of Section.

(i) This section applies to applications for a
certificate of public convenience and necessity pursuant to G.S. 62-110.8(h)(3)
filed by an electric public utility for the construction and operation of renewable
energy facilities owned by an electric public utility for compliance with the
requirements of G.S. 62‑110.8, and to petitions to transfer a certificate
of public convenience and necessity to an electric public utility for
compliance with the requirements of G.S. 62-110.8. Applications and petitions
filed pursuant to this subsection shall be required to comply with the
requirements of this subsection and shall not otherwise be required to comply
with the requirements of G.S. 62-82 or 62-110.1, or Commission Rules R8‑61
or R8-64.

(ii) The construction of a renewable energy facility
for the generation of electricity shall include not only the building of a new
building, structure or generator, but also the renovation or reworking of an
existing building, structure or generator in order to enable it to operate as a
generating facility.

(iii) This section shall apply to any person within its
scope who begins construction of a renewable energy facility without first
obtaining a certificate of public convenience and necessity. In such
circumstances, the application shall include an explanation for the applicant's
beginning of construction before the obtaining of the certificate.

(iv) This section applies to a petition to transfer an
existing certificate of public convenience and necessity issued for renewable
energy facilities that an electric public utility acquires from a third party
with the intent to own and operate the renewable energy facility to comply with
the requirements of G.S. 62‑110.8.

(2) The Application. The application shall be
comprised of the following exhibits:

(i) Exhibit 1 shall contain:

1. The full and correct name, business address,
business telephone number, and electronic mailing address of the electric
public utility;

2. A statement describing the electric public
utility's corporate structure and affiliation with any other electric public
utility, if any; and

3. The ownership of the facility site and, if the
owner is other than the applicant, the applicant's interest in the facility site.

(ii) Exhibit 2 shall contain the following site
information:

1. A color map or aerial photo showing the
location of the generating facility site in relation to local highways,
streets, rivers, streams, and other generally known local landmarks, with the
proposed location of major equipment indicated on the map or photo, including:
the generator, fuel handling equipment, plant distribution system, startup
equipment, site boundary, planned and existing pipelines, planned and existing
roads, planned and existing water supplies, and planned and existing electric
facilities. A U.S. Geological Survey map or an aerial photo map prepared via
the State's geographic information system is preferred;

2. The E911 street address, county in which the
proposed facility would be located, and GPS coordinates of the approximate
center of the proposed facility site to the nearest second or one thousandth of
a degree; and

3. Whether the electric public utility is the site
owner, and, if not, providing the full and correct name of the site owner and
the electric public utility's interest in the site.

(iii) Exhibit 3 shall include:

1. The nature of the renewable energy facility,
including the type and source of its power or fuel;

2. A description of the buildings, structures and
equipment comprising the renewable energy facility and the manner of its
operation;

3. The gross and net projected maximum dependable
capacity of the renewable energy facility as well as the renewable energy
facility's nameplate capacity, expressed as megawatts (alternating current);

4. The projected date on which the renewable
energy facility will come on line;

5. The service life of the project;

6. The projected annual production of the
renewable energy facility in kilowatt-hours, including a detailed explanation
of the anticipated kilowatt and kilowatt-hour outputs, on-peak and off-peak,
for each month of the year; and

7. The projected annual production of renewable
energy certificates that is eligible for compliance with the State's renewable
energy and energy efficiency portfolio standard.

(iv) Exhibit 3 shall include:

1. A complete list of all federal and state
licenses, permits and exemptions required for construction and operation of the
renewable energy facility and a statement of whether each has been obtained or
applied for; and

2. A copy of those that have been obtained should
be filed with the application; a copy of those that have not been obtained at
the time of the application should be filed with the Commission as soon as they
are obtained.

1. The utility's most recent biennial report and
the most recent annual report filed pursuant to Rule R8-60, plus any proposals
by the utility to update said reports;

2. The extent to which the proposed facility would
conform to the utility's most recent biennial report and the most recent annual
report that was filed pursuant to Rule R8-60;

3. A statement of how the facility would
contribute to resource and fuel diversity, whether the facility would have
dual-fuel capability, and how much fuel would be stored at the site;

4. An explanation of the need for the facility,
including information on energy and capacity forecasts; and

5. An explanation of how the proposed facility
meets the identified energy and capacity needs, including the anticipated
facility capacity factor, heat rate, and service life.

(3) Petition for transfer of certificate of
public convenience and necessity. When an electric public utility procures an
operating renewable energy facility through a CPRE RFP Solicitation with intent
to own and operate the facility and the renewable energy facility has been
previously issued a certificate of public convenience and necessity, the
electric public utility shall petition the Commission to transfer the
certificate of public convenience and necessity. A petition requesting that the
Commission transfer a certificate of public convenience and necessity shall
include the following:

(i) a description of the terms and conditions of the
electric public utility's procurement of the renewable energy facility under
the CPRE Program and an identification of any significant changes to the
information in the application for the certificate of public convenience and
necessity, which the Commission considered in the issuance of the certificate
for that facility;

(ii) The signature and verification of the electric
public utility's employee or agent responsible for preparing the petition
stating that the contents thereof are known to the employee or agent and are
accurate to the best of that person's knowledge; and

(iii) The verification of a person authorized to act on
behalf of the certificate holder that it intends to transfer the certificate of
public convenience and necessity to the electric public utility.

(4) Procedure for Acquiring Project Development
Assets. — When an electric public utility purchases from a third party
developer assets that include the rights to construct and operate a renewable
energy facility that has been issued a certificate of public convenience and
necessity with the intent of further developing the project and submitting the
renewable energy facility in to a future CPRE RFP Solicitation, the electric
public utility shall provide notice to the Commission in the docket where the
certificate of public convenience and necessity was issued that the electric
public utility has acquired ownership of the project development assets. The
electric public utility shall not be required to submit a petition for transfer
of the certificate of public convenience and necessity unless and until the
project is selected through a CPRE RFP Solicitation or the electric public
utility otherwise elects to proceed with construction of the renewable energy
facility. If the project is selected through a CPRE RFP Solicitation or the
electric public utility otherwise elects to proceed with construction of the
renewable energy facility, the electric public utility shall file a petition to
transfer the certificate of public convenience and necessity, and the
Commission shall process the petition in the same manner provided in (6) of
this subsection. In any event, the petition shall be filed prior to the
electric public utility commencing the construction or operation of the
renewable energy facility, and no rights under the certificate of public
convenience and necessity shall transfer to the electric public utility unless
and until the Commission approves transfer of the certificate.

(5) Procedure for expedited review of
applications for a certificate of public convenience and necessity. – The
Commission will process applications for certificates of public convenience and
necessity filed pursuant to this section as follows:

(i) The electric public utility shall file with the
Commission its preliminary plans at least 30 days before filing an application
for a certificate of public convenience and necessity. The preliminary plans
shall include the following:

1. Exhibit 1 shall contain the following site
information:

a. A color map or aerial photo (a U.S.
Geological Survey map or an aerial photo map prepared via the State's
geographic information system is preferred) showing the proposed site boundary and
layout, with all major equipment, including the generator and inverters,
planned and existing roads, planned and existing water supplies, and planned
and existing electric facilities;

b. The E911 street address, county in which the
proposed facility would be located, and GPS coordinates of the approximate
center of the proposed facility site to the nearest second or one thousandth of
a degree;

c. The full and correct name of the site owner
and, if the owner is other than the applicant, the applicant's interest in the
site;

d. A brief general description of practicable
transmission line routes emanating from the site, including a color map showing
their general location; and

e. The gross, net, and nameplate generating
capacity of each unit and the entire facility's total projected dependable
capacity in alternating current (AC).

2. Exhibit 2 shall contain a list of all agencies
from which approvals will be sought covering various aspects of any generation
facility constructed on the site and the title and nature of such approvals;
and

3. Exhibit 3 shall include a schedule showing the
anticipated beginning dates for construction, testing, and commercial operation
of the generating facility.

(ii) Within ten days of the filing of its preliminary
plans, the Applicant shall cause to be published a notice of its filing of
preliminary plans to apply for an expedited certificate of public convenience
and necessity in a newspaper having general circulation in the area where the
generating facility. The notice shall be in the form provided in the Appendix
to this Chapter, and the applicant shall be responsible for filing with the
Commission an affidavit of publication to the effect that the notice was
published as required by this rule;

(iii) The Chief Clerk will deliver 2 copies of the
electric public utility's preliminary plans to the Clearinghouse Coordinator of
the Office of Policy and Planning of the Department of Administration for
distribution by the Coordinator to State agencies having an interest in the
application. The Chief Clerk will request comments from state agencies within
30 days of delivering notice to the Clearinghouse Coordinator.

(iv) The applicant shall file the application within 60
days of filing of its preliminary plans.

(v) The Commission will issue an order requesting the
Public Staff to investigate the application and present its findings,
conclusions, and recommendations at the Regular Commission Staff Conference to
be held on the third Monday following the filing of the application, and requiring
the applicant to publish notice of the application and of the time and place of
the Staff Conference where the application will be considered. The notice shall
be published once in a newspaper of general circulation in the area where the
generating facility is proposed to be constructed. The applicant shall be
responsible for filing with the Commission an affidavit of publication to the
effect that the notice was published as required by this rule.

(vi) If significant complaint(s) are filed with the Commission
prior to the Regular Commission Staff Conference where the application is to be
considered, the Public Staff shall report the same to the Commission and the
Commission shall schedule a public hearing to determine whether a certificate
should be awarded. The Commission will give reasonable notice of the time and
place of the hearing to the applicant and to each complaining party, and
require the applicant to publish notice of the time and place of the hearing.
The notice shall be published once in a newspaper of general circulation in the
area where the generating facility is proposed to be constructed. The applicant
shall be responsible for filing with the Commission an affidavit of publication
to the effect that the notice was published as required by this rule.

(vii) If no significant complaint(s) are received within
the time specified, the Commission may, upon its own initiative, order and
schedule a hearing to determine whether a certificate should be awarded. The
Commission will give reasonable notice of the time and place of the hearing to
the applicant and require the applicant to publish notice of the time and place
of the hearing. The notice shall be published once in a newspaper of general
circulation in the area where the generating facility is proposed to be
constructed. The applicant shall be responsible for filing with the Commission
an affidavit of publication to the effect that the notice was published as
required by this rule.

(viii) The Commission, for good cause shown, may order
such additional investigation, further hearings, and required filings as it
deems necessary and appropriate to address the issues raised in the application
or by parties opposing the issuance of the requested certificate; and

(ix) If no significant complaint(s) are filed with the
Commission and the Commission does not order a hearing on its own initiative
nor order additional investigation, further hearings, or required filings, then
the Commission shall consider the application at the Regular Commission Staff Conference
as scheduled and, thereafter, issue an order on the application within 30 days
after the application is filed, or as near after the 30th days as
reasonably practicable. Where the Commission deems issuance of an order on the
application within 30 days is impossible, the Commission may issue a notice of
decision within 30 days after the application is filed and subsequently issue a
final order in the matter.

(6) Procedure for Expedited Transfer of
certificate of public convenience and necessity. — The Commission shall process
a petition to transfer a certificate of public convenience pursuant to the CPRE
Program as follows:

(i) Any petition to transfer an existing certificate
of public convenience and necessity shall be signed and verified by the electric
public utility applicant. A petition to transfer an existing certificate of
public convenience and necessity shall also be verified by the entity which was
initially granted the certificate of public convenience and necessity that it
intends to transfer the certificate of public convenience and necessity to the
electric public utility.

(ii) The Commission will issue an order requesting the
Public Staff to investigate the petition and present its findings, conclusions,
and recommendations at the Regular Commission Staff Conference to be held on
the third Monday following the filing of the application, and requiring the
applicant to publish notice of the petition and of the time and place of the
Staff Conference where the application will be considered. The notice shall be
published once in a newspaper of general circulation in the area where the
generating facility is located. The applicant shall be responsible for filing
with the Commission an affidavit of publication to the effect that the notice
was published as required by this rule.

(iii) If significant complaint(s) are filed with the
Commission prior to the Regular Commission Staff Conference where the petition
is to be considered, the Public Staff shall report the same to the Commission
and the Commission shall schedule a public hearing to determine whether the
petition for transfer of the certificate should be granted. The Commission will
give reasonable notice of the time and place of the hearing to the applicant
and to each complaining party, and require the applicant to publish notice of
the time and place of the hearing. The notice shall be published once in a
newspaper of general circulation in the area where the generating facility is
located. The applicant shall be responsible for filing with the Commission an
affidavit of publication to the effect that the notice was published as
required by this rule.

(iv) If no significant complaint(s) are received within
the time specified, the Commission may, upon its own initiative, order and
schedule a hearing to determine whether a certificate should be awarded. The
Commission will give reasonable notice of the time and place of the hearing to
the applicant and require the applicant to publish notice of the time and place
of the hearing. The notice shall be published once in a newspaper of general
circulation in the area where the generating facility is located. The applicant
shall be responsible for filing with the Commission an affidavit of publication
to the effect that the notice was published as required by this rule.

(v) The Commission, for good cause shown, may order
such additional investigation, further hearings, and required filings as it
deems necessary and appropriate to address the issues raised in the application
or by parties opposing the issuance of the requested certificate; and

(vi) If no significant complaint(s) are filed with the
Commission and the Commission does not order a hearing on its own initiative
nor order additional investigation, further hearings, or required filings, then
the Commission shall consider the petition at the Regular Commission Staff
Conference as scheduled and, thereafter, issue an order on the application
within 30 days after the application is filed, or as near after the 30th
days as reasonably practicable. Where the Commission deems issuance of an order
on the application within 30 days is impossible, the Commission may issue a
notice of decision within 30 days after the application is filed and
subsequently issue a final order in the matter.

(l) CPRE Program Power Purchase Agreement Requirements

(1) Prior to holding a CPRE RFP Solicitation,
and on or before the date set by Commission order, the Independent
Administrator shall post the pro forma contract to be utilized during the CPRE
RFP Solicitation on the IA Website to inform market participants of terms and
conditions of the competitive solicitation. The electric public utility shall
also file the pro forma contract with the Commission and identify any material
changes to the pro forma contract terms and conditions from the contract used
in the electric public utility's most recent CPRE RFP Solicitation.

(2) Each electric public utility shall include
appropriate language in all pro forma contracts (i) providing the procuring
electric public utility rights to dispatch, operate, and control the solicited
renewable energy facilities in the same manner as the utility's own generating
resources; (ii) defining limits and compensation for resource dispatch and
curtailments; (iii) defining environmental and renewable energy attributes to
include all attributes that would be created by renewable energy facilities
owned by the electric public utility; and (iv) prohibiting the seller from
claiming or otherwise remarketing the environmental and renewable energy
attributes, including the renewable energy certificates being procured by the
electric public utility under power purchase agreements entered into under the
CPRE Program. An electric public utility may propose redefining its rights to
dispatch, operate, and control solicited renewable energy facilities, including
defining limits and compensation for resource dispatch and curtailments, in pro
forma contracts to be offered in future CPRE RFP Solicitations. In addition, an
electric public utility may, within a single CPRE RFP Solicitation, propose
multiple pro forma contracts that offer different rights to dispatch, operate,
and control renewable energy facilities.

(3) No later than 30 days after an electric
public utility executes a power purchase agreement pursuant to a CPRE RFP
Solicitation, the public utility shall file the power purchase agreement with
the Commission. If the power purchase agreement is with an Affiliate, the
electric public utility shall file the power purchase agreement with the
Commission pursuant to G.S. 62‑153(a).

(4) Upon expiration of the term of a power
purchase agreement procured pursuant to a CPRE RFP Solicitation, a renewable
energy facility owner, other than the electric public utility, may enter into a
new contract with the electric public utility pursuant to G.S. 62-156 or obtain
a new contract based on an updated market based mechanism, as determined by the
Commission pursuant to G.S. 62-110.8(a). If market-based authorized revenue for
a generating facility owned by the electric public utility and procured
pursuant to this Rule was initially determined by the Commission to be in the
public interest, then the electric public utility shall similarly be permitted
to continue to receive authorized revenue based on an updated market based mechanism,
as determined by the Commission pursuant to G.S. 62-110.8(a). Any market based
rate for either utility owned or non‑utility owned facilities shall not
exceed the electric public utility's avoided cost rate established pursuant to
G.S. 62-156. If the electric public utility's initial proposal includes
assumptions about pricing after the initial term, such information shall be
made available to the Independent Administrator and all participants.

(NCUC Docket No. E-100, Sub 150, 11/06/2017.)

Rule R8-72 COMMUNITY SOLAR PROGRAM

(a) Purpose. The purpose of this Rule is to implement the
provisions of G.S. 62-126.8 as they relate to each offering utility's
implementation of a Community Solar Program for the participation of retail
customers.

(b) Definitions. Unless listed below, the definitions of
all terms used in this Rule shall be as set forth in G.S. Chapter 62. The
following terms are defined for purposes of this Rule as:

(1) "Community solar energy facility" or
"facility" means a solar photovoltaic energy system that complies
with the requirements set forth in G.S. 62-126.8(b) and (c), and is used to
satisfy a portion of the generating capacity required by G.S. 62-126.8(a).

(2) "Community Solar Program" or
"Program" means the program offered by an offering utility for the
procurement of electricity by the offering utility for the purpose of providing
subscribers the opportunity to share the costs and benefits associated with the
generation of electricity by the facility.

(3) "Community Solar Program Plan" or
"Program Plan" means the plan for implementation of the Community
Solar Program, to be filed by each offering utility for the Commission's review
and approval.

(5) "Subscriber" means a retail customer of
the offering utility who subscribes to one or more blocks of community solar
energy facility generating capacity, and is located in the state of North
Carolina and in the same county or county contiguous to the facility, unless
subject to an exemption pursuant to G.S. 62-126.8(c) and Section (e)(4) of this
Rule.

(6) "Subscription" means the individual block
of community solar energy facility generating capacity, which represents 200
watts or more of such generating capacity but not more than 100% of each
subscriber's maximum annual peak demand of electricity at the subscriber's
premises, to be purchased by a subscriber for a set term of up to twenty-five
(25) years, throughout which the subscriber receives a bill credit for the
subscribed amount of electricity generated by the facility.

(7) "Subscription fee" means any charge paid
by a retail customer in exchange for a subscription to an approved Program.

(c) Community Solar Program Plan Filing Requirements.

(1) Each offering utility shall file, on or before
January 23, 2018, an initial proposed Program Plan, which shall meet the
requirements of G.S. 62-126.8(e), and shall contain the following:

(i) the standards and processes for the
offering utility to recover reasonable interconnection costs, administrative
costs, fixed and variable costs associated with each facility, and any other
forecasted costs and intended cost recovery mechanisms;

(ii) an explanation of how non-subscribing
customers of the offering utility will be held harmless from the Program,
including a description of how the offering utility intends to avoid
cross-subsidization of Program costs with non-subscribing customers;

(iii) a description of and justification for
Program participation options available to subscribers, including a description
of any available payment plans or financing options, information on the
treatment of subscriptions if a subscriber moves within or outside of the
offering utility's service territory, and whether and how subscriptions may be
transferred from a subscriber to another customer who is eligible to participate
in the Program;

(iv) the methodology for determining the
subscription fee, including whether a subscriber would retain his or her
existing rate tariff, and a description and justification for any proposed
upfront subscription fee and the projected impact of each such fee on overall
participation in the Program;

(v) the methodology for determining the avoided
cost rate at which subscribers will receive bill credits;

(vi) the methodology for determining nameplate
capacity of a facility;

(vii) a discussion of how the Program will be
promoted, including the projected costs associated with marketing and promotion
efforts, examples of communications or marketing materials to be used, and
identification of information to be provided to customers, including but not
necessarily limited to: an itemized list of any and all charges composing the
subscription fee and the schedule upon which the charges would be due, the
process by which a subscriber can file a complaint with the Commission, and all
offering utility and Commission rules governing the Program;

(viii) a tariff, pro forma contract between the
subscriber and the offering utility, a statement of terms and conditions, or
any or all of these, that contain all terms and conditions regarding costs, risks,
and benefits to the subscriber, an itemized list of any one-time and ongoing
subscription fees, an explanation of renewable energy certificates, and when
and how the subscriber will receive notifications regarding project status and
performance;

(ix) a description of a subscriber's option to
own the renewable energy certificates produced by the facility, including how
this information will be distributed to subscribers;

(x) an estimate of economic costs and benefits
for an average program subscriber, estimated time period for a subscriber to
receive a return on investment, and a description of any quantifiable economic
or environmental benefits to non-subscribing customers;

(xi) a description of siting considerations and
site selection process;

(xii) a description and analysis of how the
offering utility's Program design will minimize costs and maximize benefits for
each subscriber;

(xiii) a description of the offering utility's
intended method for the procurement of solar energy for the Program, including
a cost estimate and justification for each method proposed;

(xiv) an implementation schedule for installing 20
MW of solar energy, including a cost estimate and justification for the
proposed schedule; and

(xv) a description of how the Program Plan is consistent
with the public interest.

(2) The offering utility shall file annually with the
Commission a report that includes any proposed amendments or revisions to its
existing Program Plan and updates on Program implementation progress, marketing
efforts, the number of participants subscribed, and capacity subscribed.

(3) An offering utility shall provide additional
updates upon request by the Public Staff, or as required by the Commission.

(4) An offering utility shall apply for and obtain
Commission approval before implementing any amendment to an existing Program
Plan, including whether to delay, suspend, or close a Program to new
subscribers.

(d) Minimum Program requirements and procedures.

(1) The offering utility may elect to own and operate
facilities to procure energy for the Program, may procure energy for the
Program through power purchase agreements with qualifying "small power
production facilities" as defined in 16 U.S.C. § 796, or both.

(2) Retail customers of each offering utility may
voluntarily subscribe to the Program on a first-come, first-served basis in a
manner consistent with any Program Plan approved by the Commission.

(3) No single subscriber shall subscribe to more than a
forty percent (40%) interest in an offering utility's Program.

(4) Subscribers may subscribe to individual blocks,
sized to represent 200 watts or more, of a facility's generating capacity.

(5) Subscribers are responsible to pay the subscription
fee for each block of facility capacity to which they subscribe.

(6) Subscribers may purchase multiple subscriptions
consistent with G.S. 62-126.8, subject to each offering utility's cap for
residential, commercial, and industrial customers limited to no more than one
hundred percent (100%) of the maximum annual peak demand of electricity of each
subscriber at the subscriber's premises.

(7) A subscriber shall be notified of Program
enrollment prior to first being billed and credited in accordance with his or
her subscription.

(1) The Commission may approve, disapprove, or modify
an offering utility's initial Program Plan, annual report, or any proposed
amendments to an existing Program Plan.

(2) After the filing of an offering utility's Program
Plan or request to amend an existing Program Plan, the Commission will issue a
procedural order setting deadlines for intervention and comments, and will proceed
as appropriate and in a manner consistent with this Rule and G.S. 62-126.8.

(3) The Commission, for good cause shown, may order any
investigation, hearing, or required filings as it deems necessary and
appropriate to address the issues raised in a Program Plan, annual report, or
any proposed amendments to an existing Program Plan filed by an offering
utility. The scope of any such investigation, hearing, or required filings
shall be limited to such issues as identified by the Commission.

(4) To the extent the offering utility seeks an
exemption of the requirement in G.S. 62-126.8(c) that subscribers must be
located in the same county or county contiguous to where the facility is
located, the offering utility shall file with the Commission a request for such
an exemption. If the Commission determines the request is in the public
interest, it shall approve the request, provided that the subscriber remains a
resident of the State and that the facility is located no more than 75 miles
from the county of the subscriber.

(5) The offering utility shall have the burden of proof
to demonstrate that the offering utility's Program Plan, annual reports, and
any proposed amendments to an existing Program Plan are reasonable and comply
with the requirements in G.S. 62-126.8 and this Rule.

(NCUC Docket No. E-100, Sub 155, 12/19/2017.)

Rule R8-73 APPLICATIONS
FOR CERTIFICATE OF AUTHORITY TO ENGAGE IN BUSINESS AS AN ELECTRIC GENERATOR
LESSOR; TRANSFERS; AND NOTICE

(a) Scope of Rule.

(1) This rule applies to applications for a certificate
to engage in business as an electric generator lessor filed pursuant to G.S. 62‑126.7
by any person seeking to own and lease one or more solar energy facilities as
authorized by and subject to the provisions of Article 6B of Chapter 62.

(2) The terms and definitions set forth in G.S.
62-126.3 apply for the purposes of this rule.

(3) This rule shall apply to any offering utility, or
any other person or entity who owns and leases a solar energy facility to
another person, holds itself out as doing so or able to do so, solicits another
person to enter into a lease of a solar facility, or that proposes such a
transaction or arrangement, by whatever name, which substantively functions as
a lease of a solar energy facility, without regard to whether such person or
entity intends to do so for pecuniary gain.

(b) The Application.

(1) The Application shall be comprised of the
following:

(i) The full and correct name, business
address, business telephone number, and electronic mailing address of the
applicant;

(ii) A statement of whether the applicant is an
individual, a partnership, a limited liability company, or a corporation; and,
if a partnership, the name, telephone number, business address, and electronic
mailing address of each partner; and, if a limited liability company, the name,
telephone number, business address, and electronic mailing address of each
member; and, if a corporation, the name, telephone number, business address,
and electronic mailing address of each corporate officer; and, if a foreign
corporation, whether domesticated in North Carolina;

(iii) A listing of the electric service providers
within whose assigned service territory the applicant proposes to engage in or
solicit business as an electric generator lessor;

(iv) The proof or certification required by G.S.
62‑126.7 and this Rule, as appropriate; and

(v) A verification that the person submitting
the application is authorized to do so on behalf of the applicant, has read and
knows the content of the application, and that the contents of the application
are true to the best of his or her information or belief.

(2) Application for authority to engage in business as
an electric generator lessor shall be made on the form furnished by the
Commission and any exhibits must be attached thereto and made a part of the
application. The original and three (3) complete copies of the application,
including exhibits, must be filed with the Commission with a copy to the Public
Staff. The original and the copies shall be fastened separately. No application
shall be deemed filed until the Commission receives and collects the filing fee
as set forth in G.S. 62-300.

(3) Applications filed on behalf of a corporation are
not subject to the provision of Rule R1-5(d) that requires corporate pleadings
to be filed by a member of the Bar of the State of North Carolina. Should the
Commission schedule a hearing on the application or establish a proceeding to
review the certificate, the requirements of G.S. 84‑4 and G.S. 84‑4.1
shall apply.

(4) The application shall be signed and sworn to by the
applicant. If the applicant is a partnership, one partner may sign and verify
for all; but the names and addresses of all partners must appear in the
application and a certified copy of the partnership agreement, as filed in the
county wherein the principal office of the partnership is located, must be
filed with the Commission. Trade names will not be allowed unless the names and
addresses of all owners are given. If the applicant is a corporation, a duly
authorized officer of the corporation must sign and verify the application. The
names and addresses of the officers of the corporation must be given and a
certified copy of the corporate charter filed with the application. If the
applicant is a limited liability company, a manager of the limited liability
company must sign and verify the application. The names and addresses of the
principal members and managers of the limited liability company must be given
and a certified copy of the articles of organization filed with the
application.

(5) Pursuant to G.S. 62‑126.7, the applicant
shall provide proof or certification of the following:

(i) That the applicant is fit, willing, and
able to own and lease solar energy facilities;

(ii) That the applicant is financially solvent,
able to obtain and continue adequate insurance protection, and able to maintain
its equipment in a safe, dependable manner;

(iii) That the applicant maintains minimum limits
of $100,000 of general liability insurance coverage;

(iv) That the applicant will register with the
Commission each solar energy facility that the applicant owns and leases to a
customer generator lessee by filing an application for a certificate of public
convenience of necessity or a report of proposed construction and, if the
facility is intended to earn renewable energy certificates eligible for
compliance with the North Carolina Renewable Energy and Energy Portfolio
Standard, an application to register the facility as a new renewable energy
facility pursuant to Rule R8-66;

(v) That the applicant's lease agreements meet
the requirements of G.S. 62‑126.6, and that any payments made under the
lease are not based upon the metered output of the leased facility;

(vi) That the applicant will consent to the
auditing of its books and records by the Public Staff and the Commission
insofar as those records relate to transactions with an offering utility or a
customer generator lessee that is located in the State;

(vii) That the applicant will conduct its business
in substantial compliance with all federal and State laws, regulations, and
rules for the protection of the environment and conservation of natural
resources, the provision of electric service, and the protection of consumers;
and

(viii) That the applicant will annually file on or
before April 1 of each year, a certification of continuing compliance with G.S.
62-126.7 and this Rule.

(c) Sale or Transfer of the Certificate.

(1) No transfer or sale of a certificate may occur
before the transferee or buyer, respectively, certifies to the Commission its
present and future compliance with G.S. 62-126.7 and makes the following
additional representations:

(i) That the transferee or buyer is fit,
willing, and able to own and lease solar energy facilities;

(ii) That the transferee or buyer is financially
solvent, able to obtain and continue adequate insurance protection, and
maintain its equipment in a safe, dependable manner;

(iii) That the transferee or buyer maintains
minimum limits of $100,000 of general liability insurance coverage;

(iv) That the transferee or buyer will register
with the Commission each solar energy facility that the transferee or buyer
leases to a customer generator lessee by filing an application for a
certificate of public convenience of necessity or report of proposed
construction and, if the facility is intended to earn renewable energy
certificates eligible for compliance with the North Carolina Renewable Energy
and Energy Portfolio Standard, an application to register as a new renewable
energy facility;

(v) That the transferee or buyer's lease
agreements meet the requirements of G.S. 62‑126.6, and that any payments
made under the lease are not based upon the metered output of the leased
facility;

(vi) That the transferee or buyer will consent to
the auditing of its books and records by the Public Staff and the Commission
insofar as those records relate to transactions with an offering utility or a
customer generator lessee that is located in the State;

(vii) That the transferee or buyer will conduct its
business in substantial compliance with all federal and State laws,
regulations, and rules for the protection of the environment and conservation
of natural resources, the provision of electric service, and the protection of
consumers; and

(viii) That the transferee or buyer will annually
file on or before April 1 of each year, a certification of continuing
compliance with G.S. 62-126.7 and this Rule.

(2) If the transferee or buyer is a corporation, a true
and accurate or certified copy of its corporate charter must be filed with said
certification unless same is already on file with the Commission. If the
transferee or buyer is a limited liability company, a true and accurate or
certified copy of its articles of organization must be filed with said certification
unless same is already on file with the Commission.

(d) Amendment to Certificate. A holder of a certificate to
engage in business as an electric generator lessor shall notify the Commission
within fifteen (15) days of any material change in status, including change in
the assigned service territories where the certificate holder is operating as
an electric generator lessor.

(e) Confidential Information. If an applicant considers
certain of the required information to be confidential and entitled to
protection from public disclosure, it may designate said information as
confidential and file it under seal. Documents marked as confidential will be
treated pursuant to applicable Commission rules, procedures, and orders dealing
with filings made under seal and with nondisclosure agreements.

(f) Procedure upon receipt of Application. - Upon the
filing of an application appearing to meet the requirements set forth above,
the Commission will process it as follows:

(1) The Chief Clerk will assign a new docket or sub‑docket
number to the filing.

(2) The Commission will issue an order requiring the
applicant to transmit notice thereof to each offering utility or municipal
electric service provider within whose assigned service territory the applicant
proposes to operate. The applicant shall be responsible for filing with the
Commission a signed and verified certificate of service to the effect that the
application and notice have been mailed to each offering utility or municipal
electric service provider within whose assigned service territory the applicant
proposes to operate.

(3) If the applicant does not file the certificate of
service within twelve (12) months of the Commission's order requiring mailing
of notice, the Commission will dismiss the application.

(4) No later than twenty (20) business days after the
application is filed with the Commission, the Public Staff shall file with the
Commission and serve upon the applicant a recommendation regarding whether the
application is complete and identifying any deficiencies. If the Commission
determines that the application is not complete, the applicant will be required
to file the missing information.